Carl
Level 15

Deductions & credits

Money placed in an escrow account is his money, and it remains his money until something happens that gives cause for a withdrawal from that account to pay a debt that he is liable for.

Money put into escrow is not reported on any tax return until such time that money is used to pay a qualified and tax deductible expense. Generally when that happens, the administrator of the escrow account will send a notification of some type (usually at tax filing time) detailing withdrawals from the account, as well as who or what entity the withdrawn money was paid to, and why that money was paid. (Not all withdrawals from an escrow account may be tax deductible.)