What real estate taxes are reported as an itemized deduction subject to the new limitation?
Real estate taxes that are for your non-business property, such as your personal residence and second home are reported as itemized deductions and subject to the $40,000 limitation ($20,000 if Married Filing Separately) on state and local taxes. However, if the real estate tax is for your business or rental property it isn't subject to the limitation and would be deducted on Schedule C, F, or E.
There is also an election available for capitalizing the cost of unimproved and unproductive real property, including annual taxes paid on the property instead of deducting the taxes this year. This won't allow you a deduction this year, but it will decrease any gain from the property when you sell it. See 26 CFR 1.266-1(b)(1) for more information. You'll need to attach a statement to your return each year you make the election and mail your return to the IRS.
There is also an election available for capitalizing the cost of unimproved and unproductive real property, including annual taxes paid on the property instead of deducting the taxes this year. This won't allow you a deduction this year, but it will decrease any gain from the property when you sell it. See 26 CFR 1.266-1(b)(1) for more information. You'll need to attach a statement to your return each year you make the election and mail your return to the IRS.
