I would appreciate any imput on the following:
A taxpayer was a joint tenant with her father on his condo. he died and the condo passed directly to her. she is in the process of selling it but it has not sold. she is paying real estate taxes, condo fes, insurance and some utilities to keep it in good condition. my thoughts are that it is investment property to her and any cost would be deductible as investment expenses. i felt she could capitalize the cost under regulation section 1.266. However now i'm not so sure. TTB changed the discussion concerning the election to capitalize interest and taxes on page 4-14 from 2005 to 2006. In 2005 it indicated the election was eligible for real property however in 2006 it indicates this electin is available for unimproved land. the regulation indicate capitalization is available for unimproved and unproductive real property. What does unimproved real property mean-is that strictly vacant land? Can these cost be capitalized or are they deductible only as investment expenses on Schedule A.
A taxpayer was a joint tenant with her father on his condo. he died and the condo passed directly to her. she is in the process of selling it but it has not sold. she is paying real estate taxes, condo fes, insurance and some utilities to keep it in good condition. my thoughts are that it is investment property to her and any cost would be deductible as investment expenses. i felt she could capitalize the cost under regulation section 1.266. However now i'm not so sure. TTB changed the discussion concerning the election to capitalize interest and taxes on page 4-14 from 2005 to 2006. In 2005 it indicated the election was eligible for real property however in 2006 it indicates this electin is available for unimproved land. the regulation indicate capitalization is available for unimproved and unproductive real property. What does unimproved real property mean-is that strictly vacant land? Can these cost be capitalized or are they deductible only as investment expenses on Schedule A.
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