"I used to work from home but on the advice of our CPA did not claim a deduction for my office. The square footage / usage figures were almost insignificant as a percentage of the total, and he said---which I'm sure you already know--- that those deductions are red flags for IRS auditors." My former CPA gave me the exact same advice, so for many years, I didn't. This year, I decided to see how big a deduction I was giving up and how much of a tax impact it had -- NOT enough! So I took it out, even though I'm clearly entitled to claim it.

IMHO, you need to be careful claiming the sales tax deduction for sales tax that you personally didn't pay. Is the builder who bought the materials claiming the sales tax as part of his cost of materials on his return? If so, those dollars for sales taxes paid are already being deducted by the builder. If you also deduct the sales tax that the builder paid, then the deduction is being taken twice for the same amount of sales tax. I think the IRS would frown on 2 deductions for the same dollars spent in sales tax. If the builder is paying materials under a tax exempt numer, then reselling those materials to you and charging you sales tax, that amount should be reflected on your invoice as zone 8grandma suggests and would be deductible on your return. I know nothing about Washington sales tax law, but I do believe that that both you and your builder claiming a deduction for the same sales tax would be frowned on by the IRS. Hopefully this makes sense. I've rewritten it several times and am still not sure it's clear what I'm trying to say.

Mary, are you sure about that and how are they deductible? For example if I am selling a house for 700k and buying a house for 800k I do not have to worry about paying tax on the gain. Is this the situation or some other situation where it is actually deductible as some type of personal expense? Is the realtor commission deductible or only as part of the sale if I am not buying a more expensive house (or my profit is more than 500k for a married couple) Also what expenses, mortgage recording tax, which is payable to my local county or town, is this deductible? For whom and why, this is normally paid by buyer Title insurance (whether for bank or homeowners?) Prepaying any property tax would be New survery, normally paid by buyer, deductible if done by seller or only if not buying a more expensive house? Bank fees, bank attorney fees, points? Deductible? By whom and why Would love to know the answers without calling an accountant For more expensive houses, not starter homes, in the NE, anyone heard of seller paying closing costs? Also in NY there is a mansion tax for sales over 1 million (usually nothing near a mansion, more like a 4 bedroom colonial from 1960 with the original kitchen) so you never want to up the purchase price when you get near that number

Read this... Here is a link that might be useful: Interest + Points