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Posted by D. Stussy on January 21, 2008, 5:30 pm
Please log in for more thread options > "Rick Blaine"wrote:
>
> > Deductability of expenses/taxes generally falls on the person who paid
> > them.
> > Since I have a HUD-1 that shows that I (the seller) paid those taxes, it
> > would
> > follow that if they are deductable, I would be the person to take the
> > deduction.
>
> The identity of the payer was missing from the OP.
>
> > It's a somewhat unusual situation as most states have sales taxes. A
few,
> > including this one, have a goods & services tax, which is much more
> > broadly
> > applied.
>
> Also new information. In the OP, it was a "gross receipts" tax, which is
a
> form of income tax, not sales tax.
>
> > I suspect it will only be deductible if I opt for the sales tax
deduction
> > instead of the income tax deduction.
>
> Correct. Plus it must be a "general" tax, as opposed to the transfer
taxes
> that you (or the buyer) may also have paid. Is there a general rate for
> sales of goods and services? That would be the amount that would be
> deductible as sales tax.
>
> If you don't take the sales tax deduction for the year in question, the
tax
> paid would add to your basis.
What basis? He's selling the property, not buying it. I would add it to
the cost of the sale.
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