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The intangible personal property tax is levied against
notes, bonds, and other obligations for the payment of money
which are secured by a mortgage, deed of trust, or other lien
upon real property situated in the State of Florida. Fla. Stat.
ch. 199.133(1) (1989). The documentary stamp tax is levied on
mortgages, trust deeds, or other evidences of indebtedness filed
or recorded in the State of Florida. Fla. Stat. ch. 201.08(1)
(1989).
In the statutory notices of deficiency, respondent
disallowed REE's and ME's claimed deductions for taxes on the
ground that the taxes constituted capital expenditures.
Section 164(a) provides:
SEC. 164. TAXES.
(a) General Rule.--Except as otherwise provided in
this section, the following taxes shall be allowed as a
deduction for the taxable year within which paid or accrued:
(1) State and local, and foreign, real property taxes.
(2) State and local personal property taxes.
(3) State and local, and foreign, income, war profits,
and excess profits taxes.
(4) The GST tax imposed on income distributions.
(5) The environmental tax imposed by section 59A.
In addition, there shall be allowed as a deduction State and
local, and foreign, taxes not described in the preceding
sentence which are paid or accrued within the taxable year
in carrying on a trade or business or an activity described
in section 212 (relating to expenses for production of
income). Notwithstanding the preceding sentence, any tax
(not described in the first sentence of this subsection)
which is paid or accrued by the taxpayer in connection with
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