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IRC Regulation 1.266-1 Capitalize Taxes and Carrying Charges Election in Lacerte

by Intuit•1• Updated 3 months ago

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.
  • The election requires a statement in the taxpayer's return describing the property and the expenses to which the election applies.
  • If the property produces income in a given year, the election isn't available.
  1. Go to Screen 46, Elections.
  2. Scroll down to Election to Capitalize Taxes & Carrying Charges section.
  3. Check the box Capitalize taxes and carrying charges [266].
  4. Complete the other 3 inputs in this section.
  5. To create multiple elections, click Add in the left navigation panel and repeat step 2 through 4.
  1. Go to Screen 33, Elections.
  2. Select Election 1 in the left-hand navigation menu.
  3. Scroll down to Election to Capitalize Taxes & Carrying Charges section.
  4. Check the box Capitalize taxes and Carrying charges [266].
  5. Complete the other 3 inputs in this section.
  6. To create multiple elections, click Add in the left navigation panel and repeat step 2 through 4.
  1. Go to Screen 38, Elections.
  2. Select Election 1 in the left-hand navigation menu.
  3. Scroll down to Election to Capitalize Taxes & Carrying Charges section.
  4. Check the box Capitalize taxes and Carrying charges [266].
  5. Complete the other 3 inputs in this section.
  6. To create multiple elections, click Add in the left navigation panel and repeat step 2 through 4.
  1. Go to Screen 41, Elections.
  2. Select Election 1 in the left-hand navigation menu.
  3. Scroll down to Election to Capitalize Taxes & Carrying Charges section.
  4. Check the box Capitalize taxes and Carrying charges [266].
  5. Complete the other 3 inputs in this section.
  6. To create multiple elections, click Add in the left navigation panel and repeat step 2 through 4.

In all modules, the election is included with the e-filed return and listed in the e-file summary for verification.

To view the election:

  1. Go to the Forms tab.
  2. Select Elections from the Form list in the left navigation panel.

See IRC Regulation 1.266-1, Capitalize Taxes & Carrying Charges Election for more information.

Lacerte Tax

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