Sales Tax Deduction for Major Purchase

[Purplecow73]

I purchased a house in Delaware for cash.  Although Delaware has no sales tax, I paid a large one-time "Transfer Tax" for the purchase. Can I claim a deduction? 

[Vanessa A]

No, transfer taxes are not tax deductible. They are included in the cost basis of your home, so when you sell your home, it will help to decrease your profit and potentially your taxable gain. 

[Purplecow73]

Thanks, Vanessa, for such a clear and prompt response.  Very appreciated.

[ErnieS0]

Delaware has a first=time homebuyer tax credit. You can get a refund of up to $2,000 against up to $400,000 of the cost of your home if you (or your spouse) have never owned a home.

File Form RTT-FHB. This is not an income tax form or part of your Delaware income tax return.

See First-Time Home Buyer Tax Credit FAQs.

[Purplecow73]

thanks, Ernie. My wife and I have owned homes before. 

[ErnieS0]

Unfortunately, you will not be eligible for the first-time homebuyer credit. As Tax Expert VanessaA says, you can add it to the cost of your home to lower any profit if and when you sell your house.

[Purplecow73]

Got it. Thanks. 

PS: If you have a chance, I posted another question in the deductions section this morning about another major purchase (car) in a different state.