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Question

Are the state and city transfer taxes that are paid at closing on a real estate transaction in Manhattan tax deductible for the persont that is paying the tax?

Submitted: 40 days and 7 hours ago.
Category: Tax
Value: $15
Status: CLOSED

Accepted Answer

Hello kmac,

Transfer taxes (or stamp taxes). You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. If you are the buyer and you pay them, include them in the cost basis of the property. If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale.

Please refer to the following IRS publication under the section titled Real Estate Taxes - Items you cannot Deduct.

http://www.irs.gov/publications/p530/ar02.html#en_US_publink100011838

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thankyou kmac

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Expert: Merlo
Pos. Feedback: 99.8 %
Accepts: 
Answered: 10/12/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad

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