I am trying to determine where to report the following expense:
- Have had 3 rental properties for 10+ years, so have filed schedules many times.
- In Jan. 2023, inherited a 4th property (an existing rental of the deceased)
- Rented the property until Nov 2023
- Sold this property during last week of Dec 2023
- Added this property to the rental reporting for TY2023, reported the sale of the property on TY2023 returns.
- In 2024, I received 2 supplemental property tax bills on the property from the California county where the property is located (paid a total of $784). These property taxes were paid in 2024 and were fully charges of property tax for TY2023. Pro-rating for the time the property was a rental and the time the property was not rented (while being sold) yields $678 of expense during the rental period in 2023.
- Just for clarification on California property tax supplemental bills: The two supplemental bills were for
- 1) additional property tax from increase in assessed value for Jan 2023 - Jun 2023 after death, and
- 2) additional property tax from increase in assessed value for Jul 2023 until property sale in Dec 2023.
My question: Where do I report this expense on TY2024 return?
I have the remaining 3 properties with Sch. E's; but the sold property was closed out in the TY2023 reporting. I am uncertain if the expenses that happened after the property sale are still considered rental expense (create a Sch. E for the sold property on the 2024 return?), if these expenses are now considered some form of capital gain/loss, or something completely different?
Help is greatly appreciated.
