State capital gains tax on investment property

[Voronnyc]

I sold an investment property in Europe in 2023 and will be paying capital gains tax on the state and federal level. If I pay the state capital gains tax in 2023, which is all due to the sale of the investment property, can I claim this as a business deduction for my 2023 federal return? It is around $18K.

[Anonymous_]

State income taxes that you actually paid would be an itemized deduction, not a business deduction.

See https://www.irs.gov/instructions/i1040sca

[Voronnyc]

Actually that's for personal itemized deductions. I'm referring to a business situation where business expenses are listed on Schedule E, detailing deductible business expenses.

[Anonymous_]

You wrote that you sold property held for investment purposes and will have to pay capital gains tax at the state level. That tax would not be a deductible business expense.