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Level 2
posted Jun 5, 2019 11:52:28 PM

Sold rental property and gave the buyer a credit for 2018 real estate taxes payable in 2019. Can I deduct as an expense for 2018 or wait till 2019?

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1 Best answer
Expert Alumni
Jun 5, 2019 11:52:30 PM

You can deduct this as a rental expense in 2018 as you gave the credit to your buyer in 2018. 

3 Replies
Expert Alumni
Jun 5, 2019 11:52:30 PM

You can deduct this as a rental expense in 2018 as you gave the credit to your buyer in 2018. 

Level 2
Jun 5, 2019 11:52:32 PM

I also gave the buyer an additional credit to be held in escrow for real estate taxes in the event that the initial credit was not sufficient to cover the entire tax bill.  Can this credit be used as an expense?

Expert Alumni
Jun 5, 2019 11:52:35 PM

Yes, as it is considered paid by you through the closing document. However if in 2019, you receive a refund, you'll need to report the refund as income.