Deductions & credits
Yes, Section 266 to capitalize carrying costs is an annual election.
Here's how to make this election in TurboTax Desktop:
There is a blank statement form available in TurboTax for Desktop (and TurboTax Business) using Forms Mode. However, you will need to file the form by mail as it is a user-generated form.
Click the Forms icon in the TurboTax header. In the left column, click Open Form, then type in "blank form." Click on the form to open it in the large window. You can now type in the statement you need to include with your return.
Example for capitalizing property taxes (form lines are not numbered:(
Line 1: ELECTION TO CAPITALIZE CARRYING COSTS
Line 2: For the tax year 20XX, taxpayer hereby elects under Code Section 266
Line 3: and IRS Regulations 1.266-1 to capitalize, rather than deduct, the
Line 4: following carrying costs incurred with respect to
Line 5: [describe property] located at [property location]
Line 6: XXX County AZ APN #XXX-XX-XXX-XX 3.5ac Lot
Line 6, column 2: $235 (rounded)
Line 7: XXX County AZ APN #XXX-XX-XXX-XX 2.5ac Lot
Line 7, column 2: $123 (rounded)
