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#2
09-13-2003, 09:12 AM
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 Re: who deducts real-estate taxes paid to buyer at home sale? "Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote in - quote - > "Chuckles" <chuckles[at]lipid.phys.northwestern.edu> wrote:
I think I was quite clear. See above.> > In our area real-estate taxes aren't billed until the > > following year, for example 2002 taxes were billed in two > > instalments 2/03 and 8/03... > I had a little trouble following your post, it seems like > you have crossed up the information, so let me try to > clarify what I think you want to know. There seem to be two > separate questions here: > When you buy a house you frequently reimburse the seller, > via the closing, the amount they have pre-paid for real > estate taxes... << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
09-11-2003, 11:37 PM
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| Re: who deducts real-estate taxes paid to buyer at home sale? Gene E. Utterback, EA wrote: - quote - > I had a little trouble following your post, it seems like
(I wasn't going to answer, because I was confused by> you have crossed up the information, so let me try to > clarify what I think you want to know. There seem to be two > separate questions here: the OP also, but....) - quote - > When you buy a house you frequently reimburse the seller,
Actually, in some cases the property taxes paid at closing> via the closing, the amount they have pre-paid for real > estate taxes. This is deductible by you. are reimbursement for the seller, and in some cases they are paid to the county out of escrow. - quote - > When you sell a house you frequently ARE REIMBURSED by the
OK, although you could receive the reimbursement in> buyer, via the closing, for the real estate taxes you have > pre-paid. This must be used to REDUCE the real estate tax > amount claimed on your Schedule A. a different year than the property tax was paid. - quote - > Monies that you pay for real estate taxes on your property
But they're only deductible WHEN paid to the treasurer.> are deductible even if you pay them to someone other than > the county treasurer. Remember the rule for impound accounts? << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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09-11-2003, 11:37 PM
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| Re: who deducts real-estate taxes paid to buyer at home sale? Gene E. Utterback, EA wrote: - quote - > "Chuckles" <chuckles[at]lipid.phys.northwestern.edu> wrote:
Note that sometimes, there is a small window of time where> > Maybe this is a simple question but I could not find a > > relevant post or web page. I also looked at the IRS > > publication for Sch. A and B and it wasn't helpful. > > > In our area real-estate taxes aren't billed until the > > following year, for example 2002 taxes were billed in two > > instalments 2/03 and 8/03. We bought a house and sold > > another this month (September). Naturally, at the closing of > > the old house we had to pay buyer an amount for 2003 taxes, > > prorated to closing date and increased 10% over last year's > > rate because the actual 2003 rate is not yet known. > > Similarly, at the closing of the new house, the seller paid > > us money (reverse of the above). > > > So obviously we can't deduct both > > (a) taxes we pay directly to the county for the new house > > (using money given to us by the new house seller), and > > (b) the amount we paid to the buyer of the old house to pay > > taxes on our behalf. > > > My question is, which of these two do we deduct? Although > > the amount in (b) is not being paid by us directly as a tax > > payment, it is in fact the tax for the period when we lived > > in the house. On the other hand, (a) is the amount we > > actually pay directly as taxes, but it is not really our tax > > liability; we were reimbursed for it by the seller. > > > If the correct answer is (b), do the closing papers (HUD-1 > > form) serve as proof if required? Also can we deduct the > > entire estimated amount (10% above last year's rate) we paid > > the buyer, or can we only deduct what the seller actually > > pays? (The latter seems completely unreasonable, but if the > > estimated amount contains an overpayment, that overpayment > > may not technically be deductible. Who knows.) > > > I hope these questions made sense, many thanks for any input. > I had a little trouble following your post, it seems like > you have crossed up the information, so let me try to > clarify what I think you want to know. There seem to be two > separate questions here: > When you buy a house you frequently reimburse the seller, > via the closing, the amount they have pre-paid for real > estate taxes. This is deductible by you. > When you sell a house you frequently ARE REIMBURSED by the > buyer, via the closing, for the real estate taxes you have > pre-paid. This must be used to REDUCE the real estate tax > amount claimed on your Schedule A. > Monies that you pay for real estate taxes on your property > are deductible even if you pay them to someone other than > the county treasurer. > Monies that you have received to reimburse you for taxes you > have already claimed as a deduction must be used to reduce > your real estate tax deduction. the seller hasn't yet paid the tax yet (usually between July 1 and the due date - in CA, November 1) so it could be in reverse.... << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
09-10-2003, 07:18 AM
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| Re: who deducts real-estate taxes paid to buyer at home sale? "Chuckles" <chuckles[at]lipid.phys.northwestern.edu> wrote: - quote - > Maybe this is a simple question but I could not find a
I had a little trouble following your post, it seems like> relevant post or web page. I also looked at the IRS > publication for Sch. A and B and it wasn't helpful. > In our area real-estate taxes aren't billed until the > following year, for example 2002 taxes were billed in two > instalments 2/03 and 8/03. We bought a house and sold > another this month (September). Naturally, at the closing of > the old house we had to pay buyer an amount for 2003 taxes, > prorated to closing date and increased 10% over last year's > rate because the actual 2003 rate is not yet known. > Similarly, at the closing of the new house, the seller paid > us money (reverse of the above). > So obviously we can't deduct both > (a) taxes we pay directly to the county for the new house > (using money given to us by the new house seller), and > (b) the amount we paid to the buyer of the old house to pay > taxes on our behalf. > My question is, which of these two do we deduct? Although > the amount in (b) is not being paid by us directly as a tax > payment, it is in fact the tax for the period when we lived > in the house. On the other hand, (a) is the amount we > actually pay directly as taxes, but it is not really our tax > liability; we were reimbursed for it by the seller. > If the correct answer is (b), do the closing papers (HUD-1 > form) serve as proof if required? Also can we deduct the > entire estimated amount (10% above last year's rate) we paid > the buyer, or can we only deduct what the seller actually > pays? (The latter seems completely unreasonable, but if the > estimated amount contains an overpayment, that overpayment > may not technically be deductible. Who knows.) > I hope these questions made sense, many thanks for any input. you have crossed up the information, so let me try to clarify what I think you want to know. There seem to be two separate questions here: When you buy a house you frequently reimburse the seller, via the closing, the amount they have pre-paid for real estate taxes. This is deductible by you. When you sell a house you frequently ARE REIMBURSED by the buyer, via the closing, for the real estate taxes you have pre-paid. This must be used to REDUCE the real estate tax amount claimed on your Schedule A. Monies that you pay for real estate taxes on your property are deductible even if you pay them to someone other than the county treasurer. Monies that you have received to reimburse you for taxes you have already claimed as a deduction must be used to reduce your real estate tax deduction. Gene E. Utterback, EA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| buyer, deducts, home, paid, realestate, sale, taxes |
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