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Treasury Regulations · 26 CFR

§ 1.162-11. Rentals.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 162

Cite as 26 CFR § 1.162-11

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
December 24, 1960 by T.D. 6520
Last amended
September 19, 2013 by T.D. 9636
Issued under
26 U.S.C. § 162
Length
387 words · about 2 min to read
Cross-references
cites 3 Code sections and 3 regulations; cited by 10
(a) Acquisition of a leasehold. If a leasehold is acquired for business purposes for a specified sum, the purchaser may take as a deduction in his return an aliquot part of such sum each year, based on the number of years the lease has to run. Taxes paid by a tenant to or for a landlord for business property are additional rent and constitute a deductible item to the tenant and taxable income to the landlord, the amount of the tax being deductible by the latter. For disallowance of deduction for income taxes paid by a lessee corporation pursuant to a lease arrangement with the lessor corporation, see section 110 and the regulations thereunder. See section 178 and the regulations thereunder for rules governing the effect to be given renewal options in amortizing the costs incurred after July 28, 1958 of acquiring a lease. See § 1.197-2 for rules governing the amortization of costs to acquire limited interests in section 197 intangibles.
(b) Improvements by lessee on lessor's property—
(1) In general. The cost to a taxpayer of erecting buildings or making permanent improvements on property of which the taxpayer is a lessee is a capital expenditure. For the rules regarding improvements to leased property when the improvements are tangible property, see § 1.263(a)-3(f). For the rules regarding depreciation or amortization deductions for leasehold improvements, see § 1.167(a)-4.
(2) Effective/applicability date—
(i) In general. This paragraph (b) applies to taxable years beginning on or after January 1, 2014. Except as provided in paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, § 1.162-11(b) as contained in 26 CFR part 1 edition revised as of April 1, 2011, applies to taxable years beginning before January 1, 2014.
(ii) Early application of this paragraph. A taxpayer may choose to apply this paragraph (b) to taxable years beginning on or after January 1, 2012.
(iii) Optional application of TD 9564. A taxpayer may choose to apply § 1.162-11T(b) as contained in TD 9564 (76 FR 81060) December 27, 2011, to taxable years beginning on or after January 1, 2012, and before January 1, 2014.

[T.D. 6520, 25 FR 13692, Dec. 24, 1960, as amended by T.D. 8865, 65 FR 3825, Jan. 25, 2000; T.D. 9564, 76 FR 81084, Dec. 27, 2011; T.D. 9636, 78 FR 57706, Sept. 19, 2013 ]

Other regulations under § 162

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Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Regulations it cites

Cited by 10 other regulations

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Amended by T.D. 9636 (78 FR 57706)
  2. Amended by T.D. 9564 (76 FR 81084)
  3. Amended by T.D. 8865 (65 FR 3825)
  4. Issued by T.D. 6520 (25 FR 13692)

Where it sits in 26 CFR

  1. Subchapter A Income tax
  2. Part 1 Income taxes
  3. Itemized Deductions for Individuals and Corporations

Nearby sections