FL Intangibles Tax

[Jill Graff]

Situation: Client moved from Texas to Florida and bought a home. I noticed the settlement statement in FL includes, in the closing costs section, an amount paid for Intangible tax.

Question: Is this tax itemizable on Schedule A of the 1040?

Thank-you in advance.

[jeannecfl]

FL Intangible Tax

Yes, it is deductible on Schedule A itemized as other taxes.

[Zee]

Most of Florida's individual intangible taxes have been repealed. FL used to tax stocks, bonds, etc.

But, not all intangible taxes have been repealed. The intangible tax on leases of government-owned real property and the one-time intangible tax on notes secured by a mortgage on Florida real property are still in effect.

The intangible tax on the settlement statement is based on the value (amount) of the mortgage note, not the property. As such, it's really not an ad-valorem property tax. It's actually listed on the HUD settlement statement under government recording and other transfer charges as a tax stamp. I have seen it listed separately as "intangible tax" only on broker's good faith estimates of closing costs.

This fee is charged again each time a home is refinanced based on the amount of the new mortgage, not the value of the property. It's interesting it's described as a one-time tax.

My guess is most FL preparer's don't include this tax as a Schedule A property tax reduction, instead capitalizing the cost as part of the acquisition cost of the home.

There are others that may disagree, indicating that since FL classifies the intangible tax as a personal property tax, it is deductible.

I'd be interested in hearing the opinion of others on this item. I did not deduct it when we purchased our homes in Florida.

[ecb34691]

Some tax software packages still ask about it. Right or wrong many FL preparers include it.

[Dan A]

This question came up a few years ago on the old ATX board. I forget who came up with the answer that they are not deductible.. It was sure news to me. But, according to Pub 17 page 146, The Tax Book page 4-10, and Form 1040 instructions page A-5, personal property taxes are deductible if they are based on the value of the property and they are "charged on a yearly basis".

[Zee]

This question came up a few years ago on the old ATX board. I forget who came up with the answer that they are not deductible.. It was sure news to me. But, according to Pub 17 page 146, The Tax Book page 4-10, and Form 1040 instructions page A-5, personal property taxes are deductible if they are based on the value of the property and they are "charged on a yearly basis".

As I look at my settlement statement, the intangible tax is listed on my HUD statement as city/county tax/stamps, and is based on the value of the mortgage at .002 per thousand.

I'm still not sure why others are deducting this item since it is not based on the value of the home, but the mortgage. I assume from the comment "it was sure news to me", that you have been deducting this cost?

Page 6-2 of the Tax Book indicates the basis should be increased for government recording and transfer charges, recording fees, city/county tax/stamps, state tax/stamps.

If I could be convinced this should be deductible, I'd amend my returns. But, I'd have to be more than 50% right, huh?

[gkaiseril]

Do you mean Tangible Tax

Florida still has a "tangibles" tax and has dropped the "Intangilbes Tax" (sotcks, bonds and other sercuritties) as of January 1, 2007.

Intangible Tax: http://dor.myflorida.com/dor/taxes/ippt.html

Tangible Tax: http://www.flsenate.gov/statutes/ind...192/Sec032.HTM

[Zee]

Florida still has a "tangibles" tax and has dropped the "Intangilbes Tax" (sotcks, bonds and other sercuritties) as of January 1, 2007.

Intangible Tax: http://dor.myflorida.com/dor/taxes/ippt.html

Tangible Tax: http://www.flsenate.gov/statutes/ind...192/Sec032.HTM

Sorry, I don't understand this post.

If you read the information in the first link, it indicates
"Not all intangible taxes have been repealed. The intangible tax on leases of government-owned real property and the one-time intangible tax on notes secured by a mortgage on Florida real property are still in effect".

Am I missing your point?

[gkaiseril]

Did not carefuly read

Sorry, I just dind not carefully read the full article.