Your Life

Your Life

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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gb7
Pioneer
Posts: 1
Registered: ‎04-10-2018
Accepted Solution

How to report Property Tax for selling and buying home (Illinois)

We sold our home (Illinois) in August 2017. Our 1098 shows the property tax that was paid for the whole of year (2016).  Under the section, “Adjustments for items Unpaid by Seller” on the Closing Disclosure, there is a property tax (from 1/2017-8/2017). As the seller, are we supposed to add/claim this amount to the real estate  tax for this year since we still resided in the house until August 2017? If so, should this be reported for this year’s taxes or next year?

 

We also bought a home in August 2017. Under the Borrower-Paid column on the Closing Disclosure, there is a property tax reported  showing “Property Taxes 2nd installment” under the “Other Cost” heading. Who is supposed to report this amount? Is it the seller or buyer? If it’s the buyer, should it only be for the months we lived on the house? When does it get reported, is it for this year? Currently, 1098 for the home does not show any property tax.

Council Member
Posts: 516
Registered: ‎04-06-2016

Re: How to report Property Tax for selling and buying home (Illinois)

I don't have time to respond completely right now, but the information you need to answer this question can be found in Pub 530 here: https://www.irs.gov/pub/irs-pdf/p530.pdf . It talks about real estate taxes specifically on page 2-3.


That publication also has a lot of information that you might find useful with buying and selling your house-- like which closing and settlement costs can be deducted from your return and which affect your basis and how, and how to calculate your basis for the home you sold.

 

Karen