26 U.S.C. § 266 — Carrying charges

This section is about a choice taxpayers can make for certain property costs. Normally, a taxpayer might deduct taxes and "carrying charges" — costs of holding property — in the year they are paid or accrued. This section takes away that deduction in one specific case. The taxpayer must elect, following regulations written by the Secretary, to treat those taxes or carrying charges as "chargeable to capital account." That means treating the cost as part of the property's cost, not as a current expense. If the taxpayer makes that election, no deduction is allowed for those amounts. The taxpayer effectively trades an immediate deduction for adding the cost to the property's basis instead.