what part of schedule A can I deduct sales tax of the materials we bought to build our house?

Question

We hired a builder to build our house but we also did a lot ourselves, like painting and staining and installing built-in appliances.I know we can't deduct what the builder used but I'd like to know where in the returns can we deduct the sales tax for the material we bought.Thanks...

Answer 1

If you are deducting the sales tax on the cost of materials to build your house, it would go in the same place on Schedule A as all your other state taxes you deduct. You should note however, if you deduct the sales tax, you cannot also include the sales tax in determining your basis in the house. So if you spent $10,000 on lumber and paid $600 in sales tax, you would deduct the $600, but only the $10,000 would be included in your basis, not the full price you paid of $10,600.

Answer 2

You would deduct the sales tax on line 5 of the Schedule A put ST next to the box 5. this is the form you use to Itemize your deductions, You have a choice of deducting the Sales tax you paid or the State and Local income tax withheld from your wages, if you are not itemizing but rather taking the Standard Deduction for your filing status you would not be able to claim the deduction
Publication 600
http://www.irs.gov/pub/irs-pdf/p600.pdf

Answer 3

You will need to take the greater of your state income tax (if you have one) or state sales tax (if you have one). If you use the state taxes tax deduction, it will go on line 5 of the Schedule A and write "ST" on the end of the line to indicate sales tax.

Answer 4

Also, if you choose to deduct sales tax, you therefore can't deduct state and local income taxes paid. You can choose one or the other -- sales or state/local income tax.