Rental property: Income and expenses-> Report Real Estate Taxes-> enter real estate taxes paid. Can I add real estate taxes from settlement document/ closing doc (4 months prepaid ) on top of what is listed in 1098 or 1098 ONLY?

[DianeW · Accepted solution]

Yes.  On the settlement document you should see your prorated share for the year of the sale.  Add those to the taxes paid on the Form 1098.  

Do not add the amount from closing that was placed in escrow.

[sudeepchopra123]

Thanks "On the settlement document you should see your prorated share for the year of the sale.  Add those to the taxes paid on the Form 1098". However, Can you please explain how to figure the amount NOT to be added from closing that was placed in escrow?

[DianeW]

It should indicate advance or escrow on the statement.

[sudeepchopra123]

'statement'- Which statement? Did you mean refinance final settlement doc, or any other statement?

[DianeW]

The final settlement doc -do not use prepaid, only what was actually paid on the tax bill, either by escrow or your direct payment.

[DianeW]

If necessary contact the real estate tax office at the courthouse.  That will be the actual payment of tax for 2016.

[sudeepchopra123]

okay, do not use pre-paid (even the 4 months of pre-paid interest paid? correct? property tax was a pre-paid to escrow account.

[DianeW]

Correct.

[sudeepchopra123]

okay. great. Thanks. In that case, what exactly can I even add on top of 1098? I can copy/paste the excerpt from settlement doc, if that helps?

[DianeW]

Only property tax if there was any paid at settlement, on a refinance it's likely there are no expenses from settlement to deduct.

[sudeepchopra123]

thanks.

[sudeepchopra123]

Also 2nd question is: "Do not add the amount from closing that was placed in escrow"
- How to determine which amount and which item from closing was placed or not placed in escrow? It doesn't explicitly call out, or does it?