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Pave the way to property tax deductions

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I live in a rural area where sidewalks are being installed and fixed. Can I deduct the extra property tax assessments?

A. It depends. You can’t deduct amounts paid for local benefits that increase the value of the property. This includes the construction of streets, sidewalks and water and sewer systems. These amounts must be added to the basis of the property. However, assessments or taxes for local benefits are deductible if they represent payments for maintenance, repair or interest charges relating to those benefits.  

Tip: If only part of the assessment is for maintenance, repair or interest charges, you must be able to show the amount of that part to claim the deduction. Check your real estate tax bill.


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