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Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Can all Local taxes be deducted What is the formula for the

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Can all Local taxes be deducted?
What is the formula for the computation of capital gain?


Hi and welcome to Just Answer!



Local taxes are deducted depending on their types. Most are deducted on the schedule A if you itemize - .

Real estate taxes – are reported on the line 6

Personal property taxes (car, etc) – on the line 8

Local income taxes or sales taxes – are reported on the line 5 – you may not deduct both – but should choose which one to claim.


Capital gains are generally reported on the schedule D – part I or II depending if the property was held more or less than a year.

The gain is calculated as (selling price) – (adjusted basis)

The basis is mainly purchase price (assuming the property was purchased) adjusted by purchase and sale expenses, improvement and some other expenses.


Let me know if you need any help or clarification.

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