You'll need to sign in or create an account to connect with an expert.
The answer to your question is no, state and / or county real estate transfer taxes are not directly tax-deductible. However, that is not the end of the story.
Any such transfer taxes or fees you pay will be added to the "cost basis" of your home, such that when you go to sell it, years later, your basis for purposes of figuring taxable gain (if any) is that much higher.
For example, if you bought your home for $500,000, and also paid $10,000 in transfer taxes and fees, your cost basis in the home is actually $510,000, not $500,000. Thus, if you sell it years later for $1,200,000, absent any other considerations or adjustments to basis, your gain is ($1,200,000 - $510,000 😃 $690,000, and not $700,000.
For further details on your basis in a home, as well as to confirm the information above and learn more on this subject as well, please refer to IRS Publication 523. In particular real estate transfer taxes (called transfer and stamp taxes) are discussed on Page 11 as an adjustment to basis. Here is a courtesy link to that document:
https://www.irs.gov/pub/irs-pdf/p523.pdf
Thank you for asking this important question.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
l-e
Level 1
abigailr2005
New Member
bilmarmur
New Member
dadoane
New Member
anuraguppal
Level 2