Election to Capitalize

[Beersheba]

In these days where there is no benefit in claiming interest/taxes/SALT because of high standard deductions, it is increasingly more beneficial to capitalize property taxes and interest onto vacant land.

What is the election called? I believe it is a code section.

[ATSMAN]

Reg. Sec. 1.266-1(b) allows the taxpayer to capitalize the following into the cost or adjusted basis of the relevant property.

In the case of unimproved and unproductive real property:

• Annual taxes;
• Mortgage interest; and
• Other "carrying charges."