John J. Reichel v. Commissioner

112 T.C. No. 2

UNITED STATES TAX COURT JOHN J. REICHEL, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 23143-97. Filed January 7, 1999. P, a real estate developer, purchased properties intending to develop them. He undertook no development activities on the properties due to adverse economic conditions. R disallowed P's deductions of the properties' real estate taxes, determining the taxes must be capitalized under sec. 263A, I.R.C., as indirect expenses of producing property. Held: P must capitalize the tax payments under sec. 263A, I.R.C. Timothy W. Tuttle, for…