Deducting propery taxes when seller paid closing costs?

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I bought my place in 2007 and had the sellers pay closing costs (in exchange for a higher close price). Included in this was a portion of the property taxes paid in 2007 for the 2006 tax year (as taxes are always paid in arrears). Since then I’ve paid property taxes for 2007 as well. When I go to deduct my property taxes for my 2007 federal taxes, do I deduct the full amount or just the portion I paid after closing?

2 Comments
  1. Reply
    oakhill
    July 20, 2011 at 10:53 pm

    You should only deduct the actual amount of property tax you paid. You should have received a statement from the mortgage company with your payments detailed. This form is also sent to the IRS, so they will have a copy of what you paid as well.

  2. Reply
    taxman_in_mn
    July 20, 2011 at 11:16 pm

    The tax the seller paid adds to the basis of your home. Any points the seller paid are deductable on your tax return. Look on the HUD-1 statement on lines 801 and 802. Any amounts on those lines are deducable by you, no matter who paid them.

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