Is King County Sewer Capacity charge lump sum tax deductible?

[bwa · Accepted solution]

It is not deductible.  It's a charge to new users to cover the costs of improvements and expansion (similar to a hook up fee, although it's spread out over several bills.) Unfortunately, those charges are not deductible.

[Opus 17]

Possibly.  I assume this is an item added to your property tax bill.  If it is a charge applied to everyone in the community for a general community benefit, then it is a deductible property tax, whether it is a flat fee or a percentage of your property value.  However, if it is a charge that is only applied to certain homes for a specific benefit for those homes (like new sewer lines installed in your neighborhood only) then the charge increases your cost basis but is not a deductible property tax.

[Opus 17]

After googling "King County Sewer Capacity charge" I see that this is a charge for new connections to the system.  since that is a specific benefit for your property, it is not deductible.  But you can add it to the cost basis of your property when you sell, and it may reduce your taxable gain.

[savi]

Ok got it. Thank you very much. King County website says if it is part of mortgage it can have tax benefit but my mortgage company did not include it.

[user17731331708]

What if I was only charged the King County Sewer Capacity Charge because I built an AADU (Attached Accessory Dwelling Unit) which I'm running as a business (AirBnB). Couldn't the charge then be depreciated as a capital improvement?

[RobertB4444]

Yes, if the charge is a business expense then it is deductible to the business.