Pre-In Service Property Taxes Chargeable to Capital Account?

[Nathan Shaffer]

Hi Everyone,

I love this site for all the helpful insight, but I haven't found an answer to my specific question (here or on the IRS website).

I bought an owner-occupied duplex in 2017 and it took 1.5 years to develop the second unit to make it "legal," considering all approvals and significant construction that needed to be done.  I am confident I can capitalize the renovation/construction/zoning costs, but what about property taxes paid in 2018 (all of which exceeded the $10,000 SALT cap based on our W-2 state taxes, so none have been deducted).  Can I capitalize 50% of the property taxes paid during the period it took to bring the unit onto the market?  There was no personal use, just construction ...

I understand that I can capitalize 50% of certain itemized costs that were incurred at the time of purchase that were not deductible against personal income at that time, so my question only applies to yearly property taxes that would normally be an ongoing deduction on a yearly basis, but which were incurred before the unit was placed into service.  

Thank you!