Quote:
Originally Posted by mak44070
According to IRS Publication 530:
"Assessments for local benefits. You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property.
You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge.
If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it.
An assessment for a local benefit may be listed as an item in your real estate tax bill. If so, use the rules in this section to find how much of it, if any, you can deduct."
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Sooooooooooooo......if I interpret the above properly, the
amount of the bond adds to the cost basis of the property and is considered to be a non-deductible amount on your taxes, which would make sense. The annual interest charges, however, sound as though they are deductible if you itemize your deductions. You'd have to figure out how much of your annual bond payment went to principal and what part went to interest - the county should be able to provide those numbers. I question, though, how much (if any) of the line item on your county tax statement for 'Special Assessment - Maint" would be considered deductible given that part of it is for maintenance and part of it is simply for operations.
Or am I missing something somewhere in the translation?
Bill