Schedule A - Sales Tax Accrued for Boat - Deductible?

[miatax]

I have a client who purchased a boat in 2008. The client financed the boat. Is the sales tax amount on contract deductible as Schedule A? Since it's financed, I'm not sure when to take the deduction but I think it would qualify in the year of purchase - 2008.

If so, is this IN ADDITION to the Sales Tax optional table amount?

There is NO state income tax in Florida so we are definitely deducting sales tax (I know that it's one or the other but not both).

Thank you.

[TAXBILLY]

Yes and yes.

taxbilly

[miatax]

Thanks Taxbilly... Also, where in ATX would I add this?

[Bart]

Thanks Taxbilly... Also, where in ATX would I add this?

Line 5 State Taxes Worksheet on Schedule A. Line 33.

[miatax]

Thank you Bart :)

[miatax]

Just got the signed 8879... Do I need to efile anything in addition to the schedule a to show why sales tax is so high? I don't think so, but I want to be sure.

[Maribeth]

Just got the signed 8879... Do I need to efile anything in addition to the schedule a to show why sales tax is so high? I don't think so, but I want to be sure.

Make sure you keep a copy of the invoice from the purchase of the boat in your files. I have had a handful of clients who have built their own homes over the last couple of years. The sales tax on this construction is deductible and every single one of those clients have had the deduction challenged. So keep a copy of the invoice, just in case.

Maribeth