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Just bought a house cash,, just looking how all this works

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Just bought a house cash,, just looking how all this works on taxes
Submitted: 2 years ago.Category: Tax
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Answered in 14 minutes by:
1/13/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,714
Experience: Taxes, Immigration, Labor Relations
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There is no taxable income just because you purchase a property.

All purchase costs are capitalized and and that is your basis.

You will need to keep all records.

When eventually the property will be sold - you will need to calculate the gain as (selling price) MINUS (adjusted basis)

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Tax Professional: Lev, Tax Advisor replied 2 years ago

As you purchase for cash - there is no mortgage interest deduction, but you still will pay real estate taxes which are deducted if you itemize.
Also because you are living in Texas and there is no income tax in this state - if you itemize - you deduct sales tax. Thus if you purchase any building materials for home improvements - sales taxes on building materials are deductible.
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I am here to help you will all tax related issues.

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