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sih58
New Member

Can we deduct past property taxes as part of cost basis on the sale of second home? Never previously deducted property taxes on it.

We purchased the property in 1991 and just sold it in 2017.  We have always filed using the standard section, so never previously deducted these property taxes.  Just need to know if we can use it the past property taxes to increase the cost basis and reduce our capital gains, 

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Accepted Solutions
CarolynM
Level 1

Can we deduct past property taxes as part of cost basis on the sale of second home? Never previously deducted property taxes on it.

No, you can only claim the deduction for taxes paid in the current year. This is not an expense to add to the cost basis.  

To calculate the cost basis of the second home, you can add improvements you made in the prior years, but not the taxes. Even if they were not claimed, they would be maintenance. 

For more information on qualifying home improvements, follow this link: Home Improvements and Your Taxes

View solution in original post

1 Reply
CarolynM
Level 1

Can we deduct past property taxes as part of cost basis on the sale of second home? Never previously deducted property taxes on it.

No, you can only claim the deduction for taxes paid in the current year. This is not an expense to add to the cost basis.  

To calculate the cost basis of the second home, you can add improvements you made in the prior years, but not the taxes. Even if they were not claimed, they would be maintenance. 

For more information on qualifying home improvements, follow this link: Home Improvements and Your Taxes

View solution in original post

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