Article Date:
June 2016

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Q&A: Yikes! Failed to Deduct Real Estate Taxes on Empty Land



I read your recent article Tax Tips for Vacant Lot and Unproductive Land and noted your statement that if you have been capitalizing carrying costs and haven’t made an election in years past, you need to submit a Form 3115 requesting a change in accounting method if you want to expense the real estate taxes.


I have a client who has capitalized real estate taxes for a number of years on empty property without an election. He could come out way ahead if he could deduct those taxes every year. In fact, with a Form 3115 and a Section 481 catch-up adjustment deduction, we might get him to produce a smile or two.


Do you know if I can claim this as an automatic accounting method change without a fee to the IRS or is this a non-automatic change that requires a filing fee? ... Log in to view full article.

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