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Major life milestones often have a major tax impact. Changes in your marital status, having a baby or adopting a child can have significant impact on your taxes. This is the place to ask questions about dependents, real estate, and other various scenarios that play a significant role in what taxes you pay.

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Pioneer
Posts: 2
Registered: ‎04-09-2018
Accepted Solution

Bought house in 2017; can I claim any property tax? Relates to Closing Disclosure

Hello,

 

This question relates to property taxes and the closing disclosure for the home I bought in 2017 (new home owner...). I apologize if this isn't the appropriate forum. I bought my house in August of 2017. I've looked over my mortgage 1098, and it indicates that I paid zero property taxes for 2017. I believe the seller paid property taxes for 2017 in full prior to the closing date, so it wouldn't have been reported on my 1098. In reviewing my closing disclosure, I've found a section under the summary of Borrower's Transactions, titled "Adjustments for Items Paid by Seller in Advance." This includes an amount (ex. $1000) for County Taxes from August '17 to 1`2/31/18. Am I correct in thinking that I can claim this amount as Real Estate tax that I paid in 2017? Additionally, I've found an earlier section that includes "Initial Escrow Payment at Closing," which includes an amount (ex. $125) for Property Taxes. Should I add the initial escrow amount to my overall Property Tax for 2017?

 

Any advice would be appreciated! Sorry again if this is not the best forum for this question; I've been having a lot of trouble finding information on this. Thank you!

Associate (Neighbor)
Posts: 212
Registered: ‎07-22-2014

Re: Bought house in 2017; can I claim any property tax? Relates to Closing Disclosure

Hello cbstiles27, and welcome to the community.

 

Not all 1098 forms for mortgages show property taxes paid - although it does make your tax preparation much easier when that is there! 

 

For most states (at least in the Upper Midwest where I've been the majority of my life), the full amount of property taxes would have been due prior to your purchase of your home in August, so the seller would have paid them.  However, as you noticed on the closing statement, there was an adjustment made for taxes that had been paid for the year - in essence, you repaid the seller for the portion of the property taxes that represent the part of the year that you owned the house.

 

Without seeing the closing document, I'm not entirely sure whether the "initial escrow payment at closing" would be for 2017 property taxes or 2018...although my guess would be that the amount listed there went into escrow to pay property taxes in 2018.  My understanding of escrow is that you pay into the account ahead of the time that the taxes are actually due, and when the bill needs to be paid, the monthly deposits that have been made should be enough to cover the amount.

 

So...in a nutshell...my recommendations:  include the amount that shows up in the "adjustments" section of the closing statement, and do not include the amount that shows in the "escrow" section.

 

Hope that helps!

 

-kurt

Pioneer
Posts: 2
Registered: ‎04-09-2018

Re: Bought house in 2017; can I claim any property tax? Relates to Closing Disclosure

It does help. Thank you for the advise! It is very much appreciated.