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Old 03-16-2011, 03:46 PM
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Special Assessment Tax Question

I pay a special assessment to the county I live in. It was explained to us it was to add the sewers and roads and helped keep the initial sale price of the houses down. The question, however, is the interest I pay on the special assessment tax deductible, and if so, where do I claim it on my tax form? I'm assuming on Schedule A.

This assessment is not claimed to the IRS, and is paid to the village I live in, so I don't have a tax ID to report.

Thanks for any help I get

Matt


Last edited by MattJr35 : 03-16-2011 at 04:14 PM.


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Old 03-19-2011, 03:18 AM
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“The question, however, is the interest I pay on the special assessment tax deductible, and if so, where do I claim it on my tax form? I'm assuming on Schedule A.”----> Many states and counties also impose local benefit tax for improvements to property, such as assessments for streets, sidewalks, and sewer lines. These taxes cannot be deducted on your tax return. However, you can increase the cost basis of your property by the amount of the assessment. However, you can deduct as taxes charges for main tenance, repairs, or interest charges related to the improvements on 1040 line 6.
See IRS Publication 551: http://www.irs.gov/pub/irs-pdf/p551.pdf



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