K-1 Question: Excise Taxes Credit to another State

[techman05]

I am a Limited Partner on an LLC located in another State. I received a K-1 and it states that I can claim a credit for excise taxes paid in that state on this partnership.

Where in TurboTax do I "claim a credit for Excise Taxes Paid" to another state?

[techman05]

the only place I see is under the State Taxes section, it says "Other State Tax Credit". However, it wants me to enter "AGI Taxed by Other State" and "Income Tax Paid to Other State"... so it is treating the credit as if I'm taxed on the ordinary income from the LLC... not giving a credit based on the excise taxes paid to that state.

[PatriciaV]

It depends. Generally, excise taxes can't be deducted on your personal return. This includes things like fuel taxes and excise taxes paid to your city or state when you sell your home.

However, some states and localities erroneously label excise taxes as personal property taxes, which may be deductible. For example, some states refer to certain vehicle registration fees as an excise tax.

Excise taxes imposed on personal property (vehicles, campers, boats, RVs, etc.) are an allowable deduction if two conditions are met:

• The excise tax is determined by the property's value, usually a set percentage.
• The excise tax is imposed annually.

Your best option is to contact the company that sent you Schedule K-1 to determine why they paid excise taxes. If this tax meets the requirements for personal property taxes, you would enter this under Deductions & Credits >> Property (Real Estate) Taxes.