cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 2

New home construction materials sales taxes

I hired a builder to construct a new home for me, and we had a 'cost-plus' contract.  The builder paid all the materials and labor costs (including sales taxes) and billed me for those costs plus his 12% contractor's fee.  I have the receipts for all the costs.  The sales taxes he paid exceeds $21000.  He paid the bills, and then I paid him that amount plus 12%.  Can I deduct these sales taxes?

1 Best answer

Accepted Solutions
Highlighted
Employee Tax Expert

New home construction materials sales taxes

Yes, you can deduct the sales tax paid for the materials used to build your home.  However, be aware that the deduction will be limited to $10,000 (or $5000 if married filing separate).  This limitation is applied to state and local taxes claimed on Schedule A as part of the Tax Cuts and Jobs Act.  

 

Be sure to keep the receipts and proof that you paid the builder the cost of the materials.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
Highlighted
Employee Tax Expert

New home construction materials sales taxes

Yes, you can deduct the sales tax paid for the materials used to build your home.  However, be aware that the deduction will be limited to $10,000 (or $5000 if married filing separate).  This limitation is applied to state and local taxes claimed on Schedule A as part of the Tax Cuts and Jobs Act.  

 

Be sure to keep the receipts and proof that you paid the builder the cost of the materials.  

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post