Welcome Guest. Register Now!  


Itemized Deductions Schedule-A


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 05-07-2016, 09:09 PM
Junior Member
 
Join Date: Apr 2016
Posts: 4
Can i deduct sellers portion of the real estate taxes?

Greetings,

We purchased a new home in 2015, and we paid 3900 dollars in property taxes in December. At closing, we were credited by the seller for his portion which was 1950 because we closed exactly middle of the year. The tax bill that was sent to us was for the entire amount, but I wonder how much of this we can put on Schedule A, is it the entire amount, or does it have to be reduced by the amount credited on the HUD for the seller's portion.

Thank you

BL



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 05-09-2016, 07:47 PM
Moderator
 
Join Date: Oct 2010
Posts: 4,838
Quote:
Originally Posted by blacklab2005 View Post
Greetings,

We purchased a new home in 2015, and we paid 3900 dollars in property taxes in December. At closing, we were credited by the seller for his portion which was 1950 because we closed exactly middle of the year. The tax bill that was sent to us was for the entire amount, but I wonder how much of this we can put on Schedule A, is it the entire amount, or does it have to be reduced by the amount credited on the HUD for the seller's portion.

Thank you

BL
you can claim only the half of the amt , $1.9KYOU actually paid; The $1.9Khas no tax consequences to you; it is neither income nor is it deductible. The seller deducts that for his property taxes paid. It's not income to you, as you just paid it to the tax district on the seller's behalf. Indeed, for tax purposes, the IRS automatically treats the seller as having paid the property taxes up to the date of sale, and the buyer having paid the taxes due after the date of salethe buyer gets a deduction for the prorated amount of real estate tax due after closing, and the seller gets the same deduction for the taxes due before closing--even if one or the other didn?t actually pay them.

BASICALLY, regardless of which year's property tax you're paying, you may deduct the property taxes in the year that you actually pay them, not the year they were due. In addition, you need to use the year the money actually goes to the taxing authority. A common disconnect is property taxes you pay through your mortgage lender with an escrow account. Instead of deducting the money in the year that you put the money in the escrow account, you must wait until the year it is paid from the escrow account.unless you itemize deductions on sch A of 1040(aslongas your itemized deduction amt exceeds your standard deduction), you can not deduct it on your federal return but may still claim it on your state return.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Paying property (real estate) taxes a year in advance hookdog Homeowner Tax 1 12-01-2015 12:42 PM
Additional Standard Deduction for Real Estate Taxes Samatg Homeowner Tax 1 01-16-2015 01:33 AM
Real Estate Professional and taxes BJY1 Rental Real-Estate 1 01-28-2014 05:03 PM
Additional Standard Deduction for Real Estate Taxes Samatg For 2009 5 04-01-2011 01:55 AM
Mortgage Interest & Real Estate/School Taxes tjs83 Itemized Deductions 1 03-26-2011 12:57 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning