LeeM
New Member

Deductions & credits

Unfortunately, not. The IRS does not consider it a "sales tax" so you can't use it for the State & Local Sales Tax deduction. Although the IRS allows you to deduct state sales or income taxes, the rules do not allow you to deduct any state or local excise taxes paid on the sale of your property. You may reduce the proceeds of your sale by the amount of excise tax paid on the transaction, however, which will in turn reduce any capital gains on the transaction.

Also, since it's a transfer tax, you can't deduct it as a property tax on Schedule A. 

The only thing you can do with the tax is use it to reduce the capital gains from selling the house, which if it was your principal residence for two of the last five years you can exclude $250k ($500k if married) of capital gains anyway so it probably won't do you much good.

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