I purchased a rental property in 2017. The seller gave me credit for unpaid property taxes at closing (included in the closing document...Let say $1000)...I didn't have the pay the 2017 property taxes till early 2018. Let say that I paid in Jan 2018 $3000 for 2017 property taxes ($1000 of that was credit from the seller for unpaid taxes)
How do I report the amount that the seller credited me for unpaid property taxes in my 2017 LLC report? Do I deduct $1000 from the basis of the cost? Or is it considered $1000 income in 2017? Or, do I deduct it from my tax expense in 2018 tax report and expense only $2000 in taxes when I submit my 2018 taxes in 2019?
Thanks!
