JanAtheCPA
Level 2
03-30-2022
09:59 PM
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Actually, the IRS says this:
Generally, taxpayers may add to the table amount any sales taxes paid on:
• A motor vehicle, but only up to the amount of tax paid at the general sales tax rate;
and an aircraft, boat, home (including mobile or prefabricated), or substantial addition
to or major renovation of a home, if the tax rate is the same as the general sales tax
rate.
The instructions for Schedule A have more information about how to apply the sales tax rules properly.
A $25,000 remodel certainly qualifies under the definition of substantial or major - but I have always been careful to tell clients that the sales tax on their new appliances (considered personal property as opposed to real property) are not included in the add-on.