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Financial Planning / Tax Strategies
|Subject: Re: Deducting state income tax||Date: 12/15/2006 5:57 PM|
|Author: wintbill||Number: 90006 of 122299|
I seem to recall that state income taxes paid can be deducted on the federal income tax return. Is this true and if so is that deduction made during the same tax year?
Yes, state and local income taxes go on 1040 Schedule A, Line 5. Instructions on what can and cannot be deducted are here:
See page 3. The deduction is taken for the tax year in which the taxes were paid.
however, my siblings and I recently sold some property in North Carolina that we inherited from our grandfather via our mother.
I don't want to create more questions, but you need to be certain that there hasn't been any oversight of step-ups in cost basis for property, Generation Skipping Transfers, split interest, and gifting rules when dealing with this type of transaction.
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