Taxpayer asks:
Where I live, you prepay property taxes by 6 months. So in 2012 I paid taxes In Jan and then in June. In July, I sold the house so at the closing I paid (I guess to the seller) the taxes for Jan-July that I occupied the house. Can I deduct these taxes as well? Thus, can I deduct the taxes for basically 18 months since they were all paid in the same calendar year.
Taxgirl says:
Absolutely!
For those property taxes to be deductible, three things have to happen:
1, You have to itemize your taxes on a Schedule A;
2, The tax must have been your own legal obligation (you know, to stop the whole “people going around paying other people’s taxes” problem which surely must be an issue); and
3, The tax must have been paid during your federal income tax year.
It doesn’t matter when the taxes were due or whether you paid them timely. The key is that they are paid in the current tax year. Sounds like you might qualify for a nice-sized deduction.
Note: The TCJA made changes to many tax deductions previously available on Schedule A, including those for state and local taxes. This is applicable for the years 2018-2025.
