Can you deduct real estate taxes paid at settlement?

We purchased a home in August 2006. At settlement we repayed the seller for the real estate taxes that they paid for the last few months of the year. Our mortgage company did not include this in our tax statement but it's on our settlement paperwork. Can we deduct that as real estate taxes paid?

Public Comments

1. many things on your settlement statement may be deductible. Take it along with the interest statement to your preparer
2. Real estate taxes paid at settlement or closing. Real estate taxes are generally divided so that you and the seller each pay taxes for the part of the property tax year you owned the home. Your share of these taxes is fully deductible, if you itemize your deductions Pubication 530 http://www.irs.gov/publications/p530/index.html
3. If the seller has prepaid real estate taxes, and you reimbursed the seller for those taxes, then you are considered to have paid those taxes and can deduct them on Schedule A. Even though the seller paid those taxes for the part of the year you owned the house, he cannot deduct them since you reimbursed him.
4. Rob is absolutely correct. However, just because you can't deduct those real estate taxes doesn't mean you lose out completely. You may add the real estate taxes you paid on behalf of the seller to the "basis" of your property, which generally means the value of your home is that much greater than what you paid for it. This becomes important when you sell the house because the more your basis in the property, the less your gain, thus the less your taxes on that gain will be, if that applies to you. If it's a personal home that you lived in for two of five years prior to the sale, you don't have to pay tax on the first $250,000 gain. Hope that helps. P.S. After rereading your question, let me add that if the seller actually paid the real estate taxes in advance for a period of time when you owned the home and you merely reimbursed him for that then, yes, you may deduct that as real estate taxes paid on Schedule A.
5. yes. you effectively paid RE taxes and they are deductible.