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What is the rule for federal tax write offs fore real estate…

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What is the rule...

What is the rule for federal tax write offs fore real estate acquired in a county tax sale

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I won a bid on tax sale properties sold by the county. Are these properties eligible for federal tax deductions?

Submitted: 3 months ago.Category: Tax
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3/26/2018
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Tax
Satisfied Customers: 2,643
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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My name is***** will assist you today.

Please give me one moment while I review your question and type my initial response

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago

When you purchase a property and depending on the use of the property, some items such as real estate tax and interest payments are deductible in the same year of the purchase.

Other cost you incur during the closing are added to the cost basis of the home and depreciated, if the property is a rental property.

Please let me know your follow up questions.

Thank you.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago

Here is an additional link for your verification from IRS.Gov

https://www.irs.gov/publications/p530

___

Deductible Real Estate Taxes

You can deduct real estate taxes imposed on you. You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year.

___

The following are some of the settlement fees and closing costs that you can include in the original basis of your home.

  • Abstract fees (abstract of title fees).

  • Charges for installing utility services.

  • Legal fees (including fees for the title search and preparation of the sales contract and deed).

  • Recording fees.

  • Surveys.

  • Transfer or stamp taxes.

  • Owner's title insurance.

  • Any amount the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, cost for improvements or repairs, and sales commissions.

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

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Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

Ask Your Own Tax Question
Tax Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 3 months ago

Please let me know if this has answered your question or if you have any additional questions.

When you have no further questions a positive rating of 5 stars is much appreciated.

Thank you!

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