Seshubabu Pasam wrote:

- quote -

The use tax is deductible if 1) you itemize, 2) your total
sales taxes paid are greater than state income tax (one or
the other) and 3) the use tax is charged at the same rate as
the General Sales Tax. This last point is important, as many
states charge a HIGHER rate on car purchases. If that is the
case in your state, you will have to reduce the amount
deducted on your Schedule A.

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Seshubabu Pasam wrote:

- quote -

If you itemize your deductions you may elect to deduct any
general sales taxes paid instead of state income taxes paid.
A compensating use tax qualifies as a sales tax. You can use
the tables for deductible sales taxes that are inside of IRS
Pub 600. You may add to the amount in the table the use tax
you paid on the motor vehicle.

http://www.irs.gov/pub/irs-pdf/p600.pdf

--
Alan
http://taxtopics.net

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"Seshubabu Pasam" <spasam[at]gmail.com> wrote:

- quote -

Transfer fee- not deductible
Use tax- deductible if you elect to take the itemized
deduction for sales tax in lieu of the deduction for income
tax (i.e. you live in a non income-tax state or the sales
tax deduction is greater than the income tax you paid.

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"Seshubabu Pasam" <spasam[at]gmail.com> wrote:

- quote -

The Use Tax is deductible if you choose to deduct sales
taxes instead of income taxes on Schedule A.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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"Seshubabu Pasam" <spasam[at]gmail.com> writes:

- quote -

No, it's not.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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"Seshubabu Pasam" <spasam[at]gmail.com> wrote
- quote -

Use tax is similar to a sales tax, so if the sales tax would
be deductible, then so would the use tax. Unfortunately,
this is not a property tax.

If you itemized, and opted to take the sales tax paid
instead of the income tax paid, it would be deductible.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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I bought a used car last year (2004). When I purchased the
car, I was charged Transfer fee ($15) and Use Tax ($644) by
the DMV. My questions is, Is this tax deductible?

Thanks
-Seshu

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