I purchased the home in Illinois, January 2016. Taxes are paid "in arrears" from escrow on the mortgage. The sellers credited 2015 taxes (reflected in 2016 tax bills) at closing; but monthly mortgage payments contribute to escrow in part for taxes.
Does the IRS consider my real-estate taxes paid -- as the bank reports in Box 10 of Form-1098 -- as deductible on the 2016 returns? Or, does the fact that the sellers credited 2015 taxes (reflected in 2016 tax bills) mean the amount in Box 10 cannot be deducted?
Alternatively, do contributions to escrow mean I effectively pre-pay 2016 property taxes and thus the IRS would consider this amount tax deductible?
