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Question for the Money Doctors

Question submitted on Feb 12, 2014.

Question

My town Lebanon, ct. installed sewer lines on our street. Then we got a assessment increase on our house. We paid our assessment tax for $1086.20 for
2013 and we will have to pay this for the next 20 years. Can I deduct the assessment tax along with my real estate tax. Thank You.

Answer

You won't be able to deduct this if the only properties subject to this assessment were those who benefited from the improvement. If, on the other hand, the entire municipality received a tax increase this would be deductible along with your real estate taxes. If the assessment was made to repair or maintain a sewer, that cost would be deductible. Frequently, the assessment for installing a benefit to a property is not deductible, but the maintenance costs can be claimed.

The assessment costs which are not deductible can be added to your basis in the property. There is a possibility that this might save you tax when you sell the property.


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