Condominium Cost Reduction Act of 1985

Condominium Cost Reduction Act of 1985 - Amends the Internal Revenue Code to permit an owner of residential rental property to elect to treat the gain from the conversion of such property into condominium units as capital gain. Limits such treatment to owners of structures which were used in the trade or business of the owner for five years prior to conversion.

Treats any gain from the sale of such units as ordinary income to the extent that such gain exceeds the allocable capital gain amount.