Tax deductions on land

I think I know the answer here, but someone on the board can validate me (or prove me wrong, I hope!). I bought an ‘improved’ lot this past year. Haven’t built on it yet and maybe never will. Do I have any tax deductions this year or do I wait until I sell the land to claim them?


land isn’t depreciable.

property taxes are deductible business expenses, as are any ordinary and reasonable expenses for maintenance such as mowing the grass, tree removal etc. This assumes that you have a real business investing in land being held for resale. If you don’t, then it’s a personal purchase and maintenance isn’t deductible (like on your house), but the taxes still would be.

demolition MAY be deductible, but usually it is included as a cost of the new structure. If you’re not rebuilding (or not for a while) I’d call it “clean up” and deduct it as a business expense.

any big items, like a new driveway, would be an improvement that would increase your basis (and lower your gain) when you sell.

Mark Wagner, CPA

Thanks Mark, much appreciated. We bought the lot with hope of reselling in a year or 2. But no business involved.