monkinjade wrote:

- quote -

When imposed on real estate, they are. In California, there
are other types of property (e.g. [land] MOTOR VEHICLES)
that are taxed annually. Some business assets (including
fixed assets of leased/rented real estate) may be separately
taxable annually.

- quote -

No. Special assessments are generally capitalizable,
especially if they are caused by some improvement to the
property or nearby (e.g. paving an access road).

If you meant SUPPLEMENTAL assessment, then yes - since that
was issued on account of the change of ownership.

- quote -

No. Per your own statement, you didn't pay the second
installment until 2003 had ended, so it cannot count for
2003 regardless of what the tax collector does with it.

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"monkinjade" <monkinjade[at]yahoo.com> wrote:

- quote -

They are the same in common parlance. But to be precise,
real estate tax is a special case of property tax which can
iclude personal property tax.

- quote -

Yes.

- quote -

The date on which you mail the payment determines the year in which the tax
is deductible.

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monkinjade[at]yahoo.com (monkinjade) wrote:

- quote -

Yes, a "real estate tax" is a particular type of property
tax. Ad valorem (according to value) taxes may be imposed
on real property, tangible personal property (like vehicles,
furniture and equipment, etc.) or intangible personal
property (stocks, bonds, etc.).

Was it a "special assessment," or a "supplemental
assessment"? I suspect the latter. If it was truly a
special assessment, limited to a particular public
improvement that benefited your property directly, then it
may not be deductible. However, when property changes hands
in California, it gets a new assessed valuation based on the
FMV at the date of change of ownership. Real property taxes
are assessed on an annual, July 1-June 30 year basis, and
are payable half in December and half in April. When you
bought your property in September 2002, it had already been
assessed for the 02-03 fiscal year at the previous owner's
value, and the regular assessment was prorated between you
and the previous owner as of the date of sale. It takes a
few months for the assessor's office to send you a
supplemental assessment, which reassesses the property at
your new valuation as of the date of change of ownership and
bills you for the difference between the tax based on the
new value from the date of change forward and the amount
that was previously assessed based on the old value. I
suspect that is the bill you received in March 2003. If so,
it is deductible in 2003, when you paid it.

You deduct your property taxes in the year in which you paid
them, not the year to which they apply, because you are a
cash basis taxpayer. I don't know why the assessor would
have credited your second half payment as of Dec. 31, 2003
if you didn't pay it until 2004. However, for federal
income tax purposes, it's deductible in the year you paid
it.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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monkinjade wrote:

- quote -

Maybe Yes and Maybe No. It depends in what context one is
discussing property taxes. There are two types. A tax on
personal property and a tax on real property. For both
federal and CA purposes, both types are deductible if they
are ad valorem taxes. I.e., an assessment at a rate applied
to the property value.

- quote -

Maybe Yes and Maybe No. If the total assessment is an ad
valorem tax, then Yes. If all or some part of the special
assessment has not been computed on the property value, then
No on the direct assessment portion. E.g., the following
items may be a direct assessment, generally by parcel:
sewer, lighting, pest control, flood control, etc.

- quote -

The payment you made 1/2/04 is a 2004 tax payment.

--
Alan
http://taxtopics.net

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I have a few questions regarding how, and when, I can claim
property taxes as deductions on my Fed. tax return.

First:
Q: Are "property taxes" the same as "real estate taxes?"

Next:
We moved into our new home in Sept. 2002, but we didn't get
a "Special Assessment until March of 2003. The entire
amound, which was over $2000 was described as a "direct
levy" on the tax bill. We paid the entire SE at that time.

Q: Can we take the entire amount of this special assessment
off as a deduction?

Finally:
We then got our normal annual tax bill at the end of the
year. We paid the first installment around Nov. 2003 and we
paid the 2nd in Jan. 2004. However, the tax collector
credited our 2nd payment for Dec. 31, 2003. They said that
they weren't sure if the IRS goes by the date on their
records or the date on my check.

Q: Can we take both installments off our 2003 taxes? Is
everything deductible, or are direct levies excluded?

thanks in advance,
Lee
Confused in CA

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