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Question about real estate tax deduction

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chassen2

Junior Member
What is the name of your state (only U.S. law)? Illinois

I purchased my home on December 13, 2013 and received a real estate tax adjustment of $2,819.90 at closing for 1/1/13 - 12/12/13.

In 2014, I paid real estate taxes in the amount of $3,103.16 as reported to me on Form 1098. My property taxes are paid a year behind, so the real estate tax bill was for 2013.

What amount can I deduct for real estate taxes on Schedule A of Form 1040?
 


AdjunctFL

Member
Hey... I think so you have to consult a knowledgeable counsel from an experienced real estate attorney,who can guide you properly.

I would never ask a real estate attorney a tax question, as that's what this is.

Assuming that the $2,819.90 was a credit to you at closing, which it should have been if taxes are paid in arrears, your deduction would be $283.26. That would be the $3,103.16 that you paid less the credit. I'm assuming the financial institution paid $3,103.16 out of escrow to the tax authority, most made up from the escrow account established at closing and charged to you.

You can't deduct real estate taxes allocated to periods that you did not own the property. The reason you received the credit was because with taxes in arrears, you were going to pay the entire year taxes, including what the seller would have paid if they had paid them for the period they owned the property.
 

LdiJ

Senior Member
I would never ask a real estate attorney a tax question, as that's what this is.

Assuming that the $2,819.90 was a credit to you at closing, which it should have been if taxes are paid in arrears, your deduction would be $283.26. That would be the $3,103.16 that you paid less the credit. I'm assuming the financial institution paid $3,103.16 out of escrow to the tax authority, most made up from the escrow account established at closing and charged to you.

You can't deduct real estate taxes allocated to periods that you did not own the property. The reason you received the credit was because with taxes in arrears, you were going to pay the entire year taxes, including what the seller would have paid if they had paid them for the period they owned the property.
I agree with this but I am not sure that the OP will entirely understand you.

If the seller paid 2819.90 for 2013's taxes at closing, so that you did not have to pay them, (in other words, gave you that deduction from your cash balance due) then again, as AdjunctFL said, you can only deduct 283.26 because that is all that you technically paid for 2013.
 

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