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Old 09-30-2013, 07:16 PM
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Post Delinquent property taxes

When calculating basis, should I include delinquent property taxes left unpaid by the seller. I believe I should include points and legal fees, is that correct.



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Old 09-30-2013, 09:21 PM
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Originally Posted by jasneedshelp View Post


#1;When calculating basis, should I include delinquent property taxes left unpaid by the seller.


#2;I believe I should include points and legal fees, is that correct.
#1;I guess it depends; delinquent taxes are unpaid taxes that were imposed on the seller for an earlier tax year. If you agree to pay delinquent taxes when you buy your home, you cannot deduct them. You treat them as part of the cost of your home as part of your home basis, I mean. In general, you can deduct real estate taxes imposed on you. You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year.


#2; Legal fees (including title search/preparing documents) increase your basis ;The IRS allows mortgage points to be deducted from your taxes. Depending on the specifics of your new mortgage, you may be able to deduct all of the points at once, or over the life of the loan. The IRS allows deduction of mortgage interest as long as your mortgage loan is not over $1 million and your equity does not exceed $1 million. If you exceed these limits, you may not be able to deduct the full amount of interest or the full amount of the points.Seller paid points decrease the home basis.



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Old 10-01-2013, 07:48 PM
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Thank you

Thank you for your prompt reply.



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