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?
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.
Thanks! Just to verify, supplemental taxes are prorated for the rental and also prorated for the second Home
Clarify for me: The supplemental taxes where assessed on the property for the entire year or just because it was a rental?
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).
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?
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?