You are here:

Tax Law (Questions About Taxes)/Expenses on Undevleloped Land

Advertisement


Question
I am a partner in a general partnership that owns a parcel of undeveloped land. We recently received a citation from the City to clean up debris on the property that others have dumped on it. We have not developed the property in any way since we purchased it. Can the cleanup expenses be recorded as a general expense of the partnership and allocated out to partners as a partership loss via K1s or do these expenses have either be capitalized or passed through to partners where the partners have to report the expenses under Misc Deductions on Sched A - if I report under Sched A, I will lose deduction due to caps on Misc deductions. So I want to simply report the expenses such that the partnership loss is allocated out and can be used to offset other K1 income.  Same question re property taxes - can they be allocated out as loss or do they have to be allocated to partners as taxes that the partners report under Taxes on Sched A - thx very much

Answer
Sorry for delay.
I am building a new house on top of regular tax season and just forgot to Check your inquiry

Yes. It (clean up _AND_ propert tax) should be current activity and not capitalized.

Ps I'd be happy to do your retuens and or the 1065 for the partnership

Patrick  

Tax Law (Questions About Taxes)

All Answers


Answers by Expert:


Ask Experts

Volunteer


MEdusa

Expertise

Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).

Experience

19 years cpa. ms tax. NOTE: My discussions are only a general information and do not constitute tax advise without entering into a specific agreement and executing an engagement letter; This free chat is nothing more than general information and should not be construed as tax advice nor does my response or replies imply an agreement to provide client specific advice or other guidance for purposes of avoiding IRS tax or penalties and should not be relied upon without your own validation and confirmation of the how the discussion may fit your facts... Not having all the facts and/or not having a direct client relationship prevents me from providing the most accurate replies as possible and I highly suggest using a local CPA to provide you with written advice and guidance. Taking matters into your own hands is much akin to trying to land an airplane without a license. It is easy to FLY a plane, but LANDING is when critical experience is key. In short, caveat emptor; do your homework and don't just rely on free chat board advice anywhere, anytime.

Organizations
AICPA, CSCPA (Ct society), National Tax,

Publications
a bunch.

Education/Credentials
MS tax and other post graduate coursework

Awards and Honors
variety including Summa Cum Laude

Past/Present Clients
I don't disclose or kiss and tell

©2016 About.com. All rights reserved.