Supplemental Taxes for second Home converted to rental.

[Silencer]

I purchased a home in April 2017 and used it as a second home.  I converted it to a rental and it was available for rent in July 2017.  Renters moved in end of July.

I paid supplemental taxes on the property in 2017 while it was a rental.  Do I add up all property taxes (including supplemental taxes) and then prorate all of it for the rental and then prorate it for the second home?  Or do I add in the supplemental property taxes only to my rental because I paid it while it was a rental?

[PaulaM · Accepted solution]

It's prorated.

For the rental, enter property taxes paid (including supplemental) from the time the unit was ready and available to rent (July-Dec).

On your schedule A enter the property taxes paid from April - July, plus any taxes that you paid at closing.

[Silencer]

Thanks!  Just to verify, supplemental taxes are prorated for the rental and also prorated for the second Home

[PaulaM]

Clarify for me: The supplemental taxes where assessed on the property for the entire year or just because it was a rental?

[Silencer]

Entire year

[Silencer]

And for 2018. So I paid for 2017 as well as 2018

[PaulaM]

I see. Well that is a different calculation then. So for 2017, prorate that years property taxes paid between the rental/second home. For the prepaid 2018 taxes, the entire amount is listed with the rental (add it to your prorated amount).

[Silencer]

Thanks!!

[PaulaM]

You are welcome 🙂

[Silencer]

Sorry. One follow up question. I didn’t notice until right now. So for my supplemental property taxes, one is actually for fiscal year beginning 7/1/16-6/30/17 and the other is for fiscal year 7/1/17-6/30/18.  Would that change the calculation?

[PaulaM]

No. It only matters what year you paid it.

[Silencer]

So the supplemental taxes from 7/1/16-6/30/17 would be for both properties (prorated for second home and prorated for the rental) whereas the supplemental property taxes from 7/1/17-6/30/18 will solely be counted for the rental, correct?

[PaulaM]

Yes. 🙂

[Silencer]

Thanks!

[PaulaM]

You are welcome 🙂