i bought a piece of property in NJ,when I report my taxes for 2006 what does this do for or against me?

Answer 1

You do not always get a deduction for property taxes. Are you constructing a house? If so, the taxes whilst under construction form part of the basis for capital gains.

If you are holding it for future private use, you do, indeed get a deduction for property taxes and, perhaps mortgage interest.

Answer 2

You'll get a credit for the property tax that you've paid in the past year. It's definitely a good thing, especially if the property is developed. If it isn't, there's still a credit but it's going to be lower (because the taxes paid are lower).

This will affect both your Federal and your State tax.