Discussion:Basis increases to Land
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Discussion Forum Index --> Tax Questions --> Basis increases to Land
| 8 July 2006 | |
| Have this client that bought a piece of land some years ago for speculative purposes. Never built a structure, now city bought it for development. Original cost was $1,500. Claims 6500 is the adjusted basis for real estate taxes that he paid though several years, maintenance and other costs of upkeep. Someone told him he could add these costs, especially the real estate taxes, he paid on the land since he never took a deduction for them. Never heard of this one and have not seen anything in the Regs. Any help.
Thanks, | |
| 8 July 2006 | |
| It's possible that your client could add portion of RE taxes to basis if s/he paid seller's share of taxes and wasn't reimbursed. See IRS Pub. 530. However, the RE taxes paid subsequent to purchase and ordinary maintenance expenses should not be added to basis to my knowlege. | |
Mtmckeecpa (talk|edits) said: | 8 July 2006 |
| Pjn,
See IRC 266, my impression is though you have to make a current election with the tax return and you can't go back and amend to make the election. Read 266 and the regs. Otherwise, go back and amend the 1040 to pickup any RE taxes paid in the prior open years. | |
| 11 July 2006 | |
| Yes, my recollection is that the 266 election must be made on the original return. | |
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