sales tax on building materials

[pookiemaw]

Is sales tax deductible on new home building materials for 2010.

[BHoffman]

I'd capitalize it as part of the home's cost basis.

[Maribeth]

Is sales tax deductible on new home building materials for 2010.

If you do not take a state income tax deduction, then yes, you can increase your state sales tax deduction on the sales tax paid on construction of a new home. Make sure you keep all your documents to support the sales tax paid. Every single one I have had has been questioned by the IRS.

Maribeth

[dmj4]

If they used a contractor:

This is what IRS says:

If under your state law, your contractor is consid-
ered your agent in the construction of the home or
substantial addition or the performance of a major
renovation. The contract must state that the con
tractor is authorized to act in your name and must
follow your directions on construction decisions. In
this case, you will be considered to have pur-
chased any items subject to a sales tax and to
have paid the sales tax directly.