Jaimee and Mike live in Austin, Texas. They married early in January 2020. They had saved a significant amount of money for their wedding, but instead decided to elope.

The couple used the money they had saved for the wedding to buy some vacant, unimproved land just outside Austin’s city limits. Given the economic growth forecastfor the area, they thought that the land was close enough to the city that it would eventually attract the attention of a property developer. 

Jaimee and Mike’s realtor told them that although their investment property was not currently generating any income, the investment would provide them with additional property tax deductions. However, Jaimee and Mike don’t think that their itemized deductions will exceed the standard deduction. They would also prefer not to have any additional AMT adjustments. A significant portion of Jaimee’s compensation consists of incentive stock options, and they are careful to manage any potential AMT liabilities.

For regular tax purposes, do Jaimee and Mike have any alternative to deducting the property taxes incurred on the investment property? If so, what impact would such an alternative have on their AMTI calculation?