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Should real estate transfer tax levied by the state (e.g. Connecticut conveyance tax) be entered as a withholding, similar to what is described in the below link? Or, is this treatment specific to New Jersey?
No the Connecticut conveyance tax is not considered state tax withheld, so it should be used an expense of sale as @Ed-Fred said.
There is a property tax credit if you paid the tax at the rate of 2.25%. It is not subject to the $200 per limit, but it is only available to Connecticut residents.
Here is an excerpt from the summary of the new legislation:
"Taxpayers may use the conveyance tax payment as the basis for the property tax credit for three years, beginning in the third tax year after the year in which the taxpayer paid the conveyance tax. The credit in each year cannot exceed 33.3% of the amount of conveyance tax the taxpayer paid at the 2.25% rate. If a taxpayer does not use the full credit in a given year because it exceeds what the taxpayer owes in income tax or paid in property tax, then the taxpayer may carry the unused portion forward for up to six successive tax years."
Click here for more details. @jcodanbury
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