I do not believe this is correct since it is not a reimbursement from prior year. The tax bill was paid the same year and there fore the reimbursement is not income. I think this is actually a bug with turbo-tax. They copy the data from the 1098 and presume it is the actual taxes you paid; what they should do is after you enter the 1098 allow you to edit property taxes paid and make the adjustment there. The difference from a tax perspective is that this money is not taxable if both transaction occurs in the same year - this can actually be a real tax difference with the new 10k limit.
