Can $200 tax stamp be deducted from yearly taxable income?

Roger65 · Apr 24, 2015

I know the answer must be "no", just thought I would ask. Of course my accountant would know. Just curious.

Classic · Apr 24, 2015

I am interested in knowing the answer too... Yes, you would have to file long form but this is a TAX and should be deductible... Great Question!

spectra · Apr 24, 2015

Probably not but would be nice if it was....

Classic · Apr 24, 2015

I did a little digging. Look at the last paragraph....
http://www.irs.gov/taxtopics/tc503.html
Sorry but I'm thinking no, but then I found the test

Tests To Deduct Any Tax
The following two tests must be met for you to deduct any tax.

The tax must be imposed on you.
You must pay the tax during your tax year.

The tax must be imposed on you. In general, you can deduct only taxes imposed on you. Generally, you can deduct property taxes only if you are an owner of the property. If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return.
You must pay the tax during your tax year. If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. If you pay your taxes by check and the check is honored by your financial institution, the day you mail or deliver the check is the date of payment. If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). See Publication 538, Accounting Periods and Methods, for details.

Roger65 · Apr 24, 2015

Classic said:
I did a little digging. Look at the last paragraph....
http://www.irs.gov/taxtopics/tc503.html
Sorry but I'm thinking no, but then I found the test

Tests To Deduct Any Tax
The following two tests must be met for you to deduct any tax.

The tax must be imposed on you.

You must pay the tax during your tax year.

The tax must be imposed on you. In general, you can deduct only taxes imposed on you. Generally, you can deduct property taxes only if you are an owner of the property. If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse's separate return or on your joint return.
You must pay the tax during your tax year. If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. If you pay your taxes by check and the check is honored by your financial institution, the day you mail or deliver the check is the date of payment. If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on the statement of the financial institution showing when payment was made is the date of payment. If you contest a tax liability and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property to provide for satisfaction of the contested liability). See Publication 538, Accounting Periods and Methods, for details.

So with a trust, the tax was not imposed on me. Also, what is the definition of "imposed". I only paid this tax because I chose to buy a non esssential taxable item. I guess that would count.

But how would it be different than declaring the tax stamp on a whiskey bottle?

wired · Jul 16, 2015

Its an excise tax and no , it is not deductible.

tjwong · Aug 26, 2015

Maybe deductible if the device was used in your business. I am fairly sure it would be. So now how would you use a NFA device in a business, maybe suppressors for a guided hunting service. Maybe machine guns in a shooting range scenario where you rent the suppressors and NFA firearms out. Anything you use to make money in a business is a tax write off, if a NFA device is used in such a business to make money the tax is another cost involved in the business which should be deductible.

wired · Aug 27, 2015

Thats a good point . You could deduct the excise tax amount and the cost of the device on a schedule C if its a legitimate business expense . You would need to show they are corporate assets though by filing the Form 4 or Form 1 as corporate property and not as trust or personal property.

pokerace · Aug 28, 2015

A can of worms..

wired · Aug 28, 2015

What can of worms? Business expenses are deducted all the time. If you run a guide service and you shoot with a silencer the IRS isnt going to have an issue with it. If you run a laundromat they would have a problem with it. Not sure its worth it for the $200 ish you will save ( if you deduct the can and the tax) considering a tax deduction only saves you the income tax on whatever the full price plus excise tax would be. Once a corporate asset it has it stay that way unless you transfer it to a personal asset then you are out the $200 for the tax again and that won't be deductible. Dissolve the business and you have to dispose of the can or transfer it to yourself.