Capitalize, Amortize or Deduct Adjusting for a New Recipe (263(a))

In an imaginary, taxpayer-friendly world, everything that is bought, acquired or paid for could be deducted at the taxpayer’s discretion, when taxpayer wanted – on purchase, incrementally, slow or fast. In that imaginary world, the tax adviser would have to simply ask “How much would you like to write off today on that purchase?”

The  imaginary “taxpayer-friendly world” is not real; however, sometimes the current tax rules are not so far off from the imaginary world.

This outline highlights a number of the significant rules in connection with whether real estate related expenditures should be capitalized, amortized or deducted.  What is interesting here is not the basic rules, but the creative areas where clients may accelerate or limit their deductions.  Following a discussion of some practical steps for practitioners, this outline presents topics in the following order:

  1. Purchases of real estate;
  2. Construction of real estate;
  3. Operation of real estate;
  4. Lease of real estate; and
  5. Sale of real estate.

To read this article in full, please click here to download a PDF copy.


Should You or Shouldn’t You Dissolve an LLC When the Business Is Over?

Originally published in the California Business Law Reporter - March 2019 - Volume 40 - Number 5.   Introduction One ...

Musings on Implications of the Repeal of the Technical Termination Provisions Under IRC 708 for 1031 Exchanges

The real estate industry customarily uses limited liability companies or limited partnerships(herein “partnerships”) to hold real estate assets due to ...


September 28, 2019 – Walk to End Alzheimer’s

WKBKY is a proud sponsor of this annual event.   To sign up click here. Held annually in more than ...
green and yellow boxes


To find out how we can help you through the complexities of today’s legal issues, call (916) 920-5286 or click below.