Real Estate Federal Tax Deductions?
Do real estate tax decutions fall in the year of payment or the year of billing on the Federal Tax Return. I purchased my house in 8/2006 but paid the 2006 taxes in April of 2007. I paid the 2007 taxes in January of 2008. On my 2007 tax return do I deduct the 2006 taxes which were paid in 2007 or the 2007 taxes which were paid in 2008? So if I pay my 2008 taxes before the year ends. I will be able to deduct my 2007 taxes (paid on January 8, 2008) and my 2008 taxes (paid before December 31, 2008)?
Public Comments
- Everything with taxes falls in the year paid, year earned. So if your property taxes are paid in arrears and you pay 2006 taxes in 2007, those are the ones you claim on your schedule A. You can only claim those taxes you actually paid in the tax year you're filing, not the taxes that were due, but not paid. And if you bought your house in 2006, at closing you probably received a credit from the seller for the taxes for 1/1/2006 through 8/2006, and that amount you do NOT get to deduct because you aren't paying it, your seller paid it to you to pay. You only get to deduct the taxes you paid, not those the seller paid. So you deduct the ones from closing date to yearend, ONLY.
- The year of actual payment determines when you get the deduction.
