Supplement prorated tax

[Greg2017]

I purchased the house on 2/28/17 and sold it on 7/7/17. The county tax agent told me that the 2 supplement tax assessments were for before 6/30/17 and after 7/1/17-7/7/17 when I was the buyer.  Please advise these 3 questions that I asked before but did not clearly answer.

1. Should these 2 supplement taxes be on Schedule A or be added to part of my cost basis?

2. Should the prorated taxes for both purchase and selling closing statements be added in the cost basis and sales proceeds to determine the gain AND not in Schedule A (is it Yes or No)

3. Where to input the estimated amount of tax withheld for my gain of selling the property on Form 593E that was deducted from my proceeds in the closing statement. Is it in Schedule A again.

[kerriP · Accepted solution]

I apologize. I thought I answered the first two questions in a general answer, however I did neglect to answer your question on estimated taxes on Form 593E.  This is answered at the bottom, last.

You NEVER include the same $s of  RE tax paid, in two places. RE TAX IS DEDUCTIBLE on SCH A  FOR THE TIME PERIOD YOU OWNED THE PROPERTY.   Any other real estate taxes allocated on closing statement may have been for DELINQUENT TAXES and are ADDED TO BASIS of the property.

General Rule:

Deduct on schedule A: RE taxes for the period you owned the house.

Closing Statement when you bought the house: Only taxes included that will cover your period of ownership (2-28-17 forward) prorated to you (presumably because seller already paid)-deduct on schedule A only.

2nd closing when you sold: If you paid(or had previously paid) real estate tax owed by the buyer (beginning on the date of sale), the buyer is considered to have paid the tax.  THE SELLER TREATS AS REDUCED SELLING PRICE.

Special assessment-time period before 6-30-17- you owned,  therefore deductible schedule A.

I do not understand after 7/1/17 -7/7/17- If you were the owner then goes on schedule A

https://ttlc.intuit.com/replies/4544252

[kerriP]

Why did you have an additional assessment for July 1 to June 2018?  This assessment should have been paid mostly by the buyer since you sold on July 2017.  See below for seller paid taxes.

You can claim any property (real estate) tax you were charged in your closing costs. Look for a "real estate tax", "property tax" or “county taxes” charge on  settlement statement note delinquent taxes are not deductible but are part of basis.

You should only deduct property taxes for the period that you owned the property, which appears to be 4 or 5 months.  If you had to pay delinquent taxes when you bought the house, these are capitalized as part of the cost of the house.

Sale of real estate. The buyer and the seller must divide real estate taxes according to the number of days that each owned the property during the year. Both are considered to have paid their share of taxes, even if one or the other paid the entire amount.

Buyer-paid taxes. Deductible by the buyer only for the period he owned the property. The buyer cannot deduct the real estate taxes of the seller. The buyer must add these taxes to the basis of the property. The seller treats this as additional sales proceeds.

Seller-paid taxes. If the seller pays real estate tax owed by the buyer (beginning on the date of sale), the buyer is considered to have paid the tax. The tax is deductible by the buyer. The buyer must reduce the basis in the property by the tax paid. The seller treats this as a reduced selling price.

[Greg2017]

I purchased the house on 2/28/17 and sold it on 7/7/17. The county tax agent told me the 2 supplement tax assessments were for before 6/30/17 and after 7/1/17-7/7/17. Please advise these 3 questions that I ask before but did not answer.
1. If I should include these 2 supplement taxes on my Schedule A or part of my cost basis.
2. The prorated taxes on both purchase and selling closing statements are in the basis of the cost and selling proceeds to determine the gain but not in Schedule A (it is Yes or No)
3. Where to input the estimated amount of tax withheld for my gain on Form 593E that was deducted from my proceeds in the closing statement when I sold my house. Is it Schedule A again?

[kerriP]

moved to answer