@miller47712 wrote:
Read IRC 266, can add carrying charges to basis
This is a matter of debate. To capitalize your carrying charges they must be "otherwise deductible". Carrying charges on investment property used to be deductible as miscellaneous itemized deductions subject to the 2% rule, but this deduction was eliminated for tax years 2018-2025. I did read an article in an accountancy journal that suggested that the carrying charges were still technically "deductible" because they are still listed under the regulations, even though the overall 2% rule is paused. The article indicated they had asked the IRS for a ruling and the IRS had not responded. However, since you definitely can't "deduct" the carrying charges using the plain language meaning of the word "deduct", I would suggest that trying to capitalize your carrying charges is a high risk strategy and you will want professional advice and representation before you do that.
