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Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Are abatement service charge liability payments tax deductible when filing NJ state tax

Customer Question

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Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.



Can you tell me more about this expense? what was the abatement service for.


Customer: replied 8 years ago.

The abatement is on property tax. Instead of paying the regular property tax, the city gives an abatement to encourage buying properties in re-development areas. However, the city requires payment known as "abatement service liability charges." I am wondering if the payments for this is tax deductible in NJ state.

Expert:  Ed Johnson replied 8 years ago.



thank you for the clarification. These types of charges are not considered tax deductible. However, if htey are for business use property, then it is included as a cost of doing business....a business expense.


If it is for primary residents or second homes, then they are added to the cost basis.