Quick real estate tax deduction question

Discussion in 'Community Discussion' started by yg17, Jan 21, 2014.

  1. yg17 macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #1
    First of all, I know I probably should be contacting a tax professional, but I don't have one since my taxes are simple enough that I do them myself, and this is an easy enough question that I'm sure someone here can answer it.

    I bought a house in 2013 and just got my 1098 for interest and real estate taxes. For real estate taxes paid, it shows the full amount of my taxes, which makes sense, but since a chunk of that came from the seller at closing, I'm under the impression that I need to pro-rate that amount so I only deduct what I paid, is that correct? Is that as simple as $X/365 * Number of days between closing and 12/31?

    Thanks in advance
     
  2. Macky-Mac macrumors 68030

    Macky-Mac

    Joined:
    May 18, 2004
    #2
    maybe this will help?

    IRS

     
  3. yg17 thread starter macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #3
    Yeah, I saw that. I guess my confusion is figuring out the prorated amount. If I use the formula I mentioned in the OP, I get one number, if I take my tax bill and subtract the amount the seller paid on the HUD-1 settlement statement, line 211, I get an entirely different number, about a $125 difference.

    Now I'm thinking subtracting the amount from the HUD-1 from my tax bill makes sense, since they're basically working with estimates when they calculate those, and taxes on this house did go up a bit over 2012, so I must've picked up the rest through escrow. But still, not sure which number to use.
     
  4. mobilehaathi macrumors G3

    mobilehaathi

    Joined:
    Aug 19, 2008
    Location:
    The Anthropocene
    #4
    Well if you want my utterly unprofessional advice (and you don't want to pay for professional advice), I say err on the side of giving the government more money. No one ever got in trouble for doing that, and it seems like the difference is paltry.
     
  5. sviato macrumors 68020

    sviato

    Joined:
    Oct 27, 2010
    Location:
    HR 9038 A
    #5
    If I recall correctly (been a while since my tax course)...the US prorates using a 360 day year, try using that.
     

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