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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2556
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I had capital gains i paid last year because of the sale of

Customer Question

i had capital gains i paid last year because of the sale of some land. Can i deduct what i paid in taxes last year (in Vermont) on this years taxes? I don't think i could deduct what i paid in federal but let me know if i could please.
Submitted: 6 months ago.
Category: Finance
Expert:  Lane replied 6 months ago.



For real estate held a year or less and sold for a gain, the Vermont tax is at the seller's regular tax rate. Until recently, Vermont excluded 40% of long-term capital gains from Vermont's income tax. But starting July 1, 2009, long-term capital gains are taxed like ordinary income, with an exclusion for the first $2,500 in annual capital gains.


So the capital gain WOULD be a part OF your total income tax paid to Vermont.


SO yes, as long as you you prepare your return on Form 1040 and itemize your deductions on Schedule A, which is the only form you can report a state tax deduction on, this would be a deduction.


Let me know if you have questions.




Customer: replied 6 months ago.
that does not answer my question. i already paid my capital gains last year. now i am doing this years taxes can i deduct what i paid on last year taxes in vermont $4,950. to the state of vt because i had capital gains. It is like the opposite of how you have to claim what you got back on in this case i paid out.