New bill passed by congress offering relief to homeowners on taxes?

Question

When I initially went to prepare my taxes the lady was telling me that congress was passing a new bill in a week or so that would allow you to deduct the general sales tax from the closing of your house on your taxes. She said I could come back mid-March and do an amendment. Does anyone know anything about this?

Answer 1

Not in the US. If your tax preparer told you that, IMMEDIATELY find a new tax preparer! She is incompetent and is NOT to be trusted.

Sales taxes are not charged on home purchases in any state anyway. The various deed transfer fees or stamp taxes are not deductible on Federal returns and must be used to increase the cost basis when you sell.

Answer 2

I am not aware of any pending legislation. Congress did add back the deduction for sales tax for tax year 2006, but the deduction is for general sales tax, and you do not pay sales tax when you purchase a home. When you purchase a home, those taxes (other than real estate property taxes that are normally deductible anyways) that you pay upon closing is generally title charges, deed transfer taxes, and or mortgage taxes. None of these constitute general sales taxes, which are the sales taxes you paid on the purchase of everyday items you buy at the store. Besides, these "tax" rates are generally much, much lower than sales taxes.

Answer 3

Run....don't walk to a new tax preparer.