Lynn EA USTCP in Louisiana Posted December 10, 2009 Report Share Posted December 10, 2009 1040 Client itemizes. Goes to Spain for a vacation. For schedule A keeps track of actual sales tax remitted. Is the VAT paid while in Spain included in the actual sales tax paid? Or is it added to foreign tax paid? Or is it ignored? Thank you, Lynn Jacobs, EA, NP Kenner, LA Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted December 10, 2009 Report Share Posted December 10, 2009 I believe the sales tax deduction specifically says state and local sales tax. I believe the personal property tax deduction specifically says state and local tax. The foreign tax that could be deducted on Schedule A is the foreign income tax. taxbilly Quote Link to comment Share on other sites More sharing options...
tilt Posted December 10, 2009 Report Share Posted December 10, 2009 I tried Googling in general and also searched the IRS site and couldn't find anything allowing this deduction. (I sure was curious though.) Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted December 10, 2009 Author Report Share Posted December 10, 2009 I tried Googling in general and also searched the IRS site and couldn't find anything allowing this deduction. (I sure was curious though.) Well, if I had just sat back and pondered this a bit, I'd have realized the answer - it's all in recognizing the forest from the trees. VAT tax = a foreign tax paid. Sales taxes = state and local taxes paid Ergo, the VAT tax may be deducted either on Schedule A, as foreign taxes paid, or taken as a foreign tax credit via form 1116 (a bear to complete in some instances). Thanks, though for considering this. Lynn Jacobs, EA, NP Kenner, LA Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted December 10, 2009 Report Share Posted December 10, 2009 Well, if I had just sat back and pondered this a bit, I'd have realized the answer - it's all in recognizing the forest from the trees. VAT tax = a foreign tax paid. Sales taxes = state and local taxes paid Ergo, the VAT tax may be deducted either on Schedule A, as foreign taxes paid, or taken as a foreign tax credit via form 1116 (a bear to complete in some instances). Thanks, though for considering this. Lynn Jacobs, EA, NP Kenner, LA Disagree. The foreign tax deduction on Schedule A and the foreign tax credit on Form 1116 are specifically for income tax. taxbilly Quote Link to comment Share on other sites More sharing options...
tilt Posted December 10, 2009 Report Share Posted December 10, 2009 I think I have to agree with taxbilly on this one. Quote Link to comment Share on other sites More sharing options...
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