Property tax deduction on investment vacant land ABOVE the $10k SALT limit?

[TX2Step]

I have been reading various threads about capitalizing costs of undeveloped land, including property taxes paid. I also consulted with a CPA who advised me that I could elect to do this but was not clear how to do so using TurboTax. I see in the last posts from @Mike9241 and @Hal_Al that one must attach a statement to the return "describing the property and the expenses to which the election applies," but no instructions on how to do this using TurboTax. Must I simply print out my tax return and MAIL it in with the attached statement? 😟Will the TurboTax guarantee still apply if I don't file electronically?

I assume after reading all the posts that this election will not affect my actual tax return, but will serve as the only means of reducing my basis in the property and thus reducing (somewhat) the capital gains incurred when we eventually sell it. On a side note (just venting), it seems patently unfair to NOT make any adjustments for inflation when it comes to determining long-term capital gains. Clearly, $15,000 in 1995 was worth a lot more than the same dollar amount today - and vice-versa. Also, how is the average taxpayer to know about including a statement in order to capitalize the costs of owning land? We never considered the land we bought to be investment property - it just kind of turned into that after a while when it became clear we were never going to build on it and live there. I always assumed that we could deduct the taxes we paid every year on it at the time we sold it to determine capital gains. I know now that this is incorrect, but it feels very unfair. 

[Hal_Al]

Q. Must I simply print out my tax return and MAIL it in with the attached statement? 

A. Yes

Q. Will the TurboTax guarantee still apply if I don't file electronically?

A. Yes. 

[TX2Step]

Thank you @Hal_Al for your prompt response. Not the answer I wanted to hear, but I get it. Maybe someone at TurboTax can figure out a way for its users to add written statements to an electronic tax filing sometime in the future. For now, I guess I will be printing and mailing in my tax return, certified mail. Thanks again.

[MANI1346]

Thank you, many years I just added property tax to Schedule A now I realized I can capitalize, so what form should I fill out on my tax return for each year.

I really appreciate it.

[DawnC]

From Mike9241's post above:  Under IRC 266 and REG 1.266-1 an annual election is required to treat the taxes as part of the capital cost.

A taxpayer who owns unimproved and unproductive real estate can elect to capitalize annual taxes, interest on a mortgage, and other carrying charges.

• The election must be made annually with the original return.
• The election requires a statement in the taxpayer's return describing the property and the expenses to which the election applies.

You will need to print and mail your return.   @MANI1346 

[Hal_Al]

Repeating from above:  taxpayers can elect to capitalize (add it to your cost basis)  the carrying costs of unimproved and nonproductive investment real property  (Regs. Sec. 1.266-1(b)(1)).  The election is made with the tax return by its due date, including extension, by attaching a statement. You cannot wait until you sell the property, but must make that election each year. Attach the statement to the return and write “Filed pursuant to section 301.9100-2” on the statement. You cannot amend prior year returns to claim capitalization.

Q. So what form should I fill out?

A. No form. A blank piece of paper.* Your name and SS# on top (both names of a joint return). 

Next line: "Election to Capitalize 2024 carrying costs.

Next line: Property located at (address)  and  “Filed pursuant to section 301.9100-2”

Then list your expenses and the amount total. 

You cannot e-file. You must mail your return with the attachment. 

 *You can get a blank form in TurboTax and type it in, then print it with the rest of the forms. Go to the forms mode. Click Open Form.  Type blank form in the search box.