Administrative Fee

• A recording tax is an administrative fee charged by your state to cover the expense of recording your title with the land records office. The Internal Revenue Service (IRS) considers the fee to be an administrative expense that is not tax exempt.
  
  

Not a Real Estate Tax

• A recording fee is not a real estate tax assessed on the value of your property. Even if your lender refers to the fee as a tax, it is not a deductible expense. If the seller pays the recording tax at the time of closing, it lowers her realized profit on the sale but she cannot claim the expense as a tax deduction.
  
  

Not Mortgage Interest

• According to IRS guidelines, a recording tax is not included as a part of your pro-rated mortgage interest at the time of closing. The recording tax is paid out-of-pocket as an administrative cost and does not qualify as a tax deductible expense.
  
  

Not Itemized

• You cannot claim a recording tax as an itemized deduction on Schedule A of your federal tax return. Since the fee is not required by the federal government and is issued for state administrative purposes, it cannot be claimed as an itemized deduction on tax Form 1040. You can use the recording fee as part of the cost basis of the property without increasing the selling price.