Is the Stamp Tax deductible on my federal taxes?

Q: I sold my condo and bought another one in 2003. I paid a tax on the sale of my condo. I think it's called a transfer tax or stamp tax. Is this tax deductible on my federal taxes? I do itemize. -- Ray

The following answer was provided by Mark Misselbeck, CPA, Levine Katz Nannis & Solomon PC, Needham.

A: The Stamp Tax is a transaction tax, not a property tax, and so is not an itemized deduction. It is a cost of selling your property, just as the real estate broker's commission, and reduces your gain from the sale. If you can claim the exclusion for the gain on the sale of your residence and that fully covers the gain, after taking into account the stamp tax, then that is the extent of the benefit from this item.