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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29577
Experience:  Taxes, Immigration, Labor Relations
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Just bought a house cash,, just looking how all this works

Customer Question

Just bought a house cash,, just looking how all this works on taxes
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

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)

Expert:  Lev replied 1 year 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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