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t0by1
New Member

Can I deduct both 2017 and 2018 real estate taxes in 2017 by prepaying a guesstimated 2018 bill.

Because of a potential 10,000 cap on real estate in 2018 and forward can I estimate and pay in 2017 the same yearly amount I just paid on 3 properties (20,000) and for 2018  prepay in 2017-10,000 in late Dec. 2017.

EX: just finished paying 20,000 real estate taxes in 2017. Can I forward a check to my Town for 10,000 to be applied to 2018 tax Bill and deduct 30,000 in itemized real estates in April 2017. I would pay the balance of 2018 bill in 2018 and meet the 10,000 cap for 2018.

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4 Replies

Can I deduct both 2017 and 2018 real estate taxes in 2017 by prepaying a guesstimated 2018 bill.

Yes, if your tax authority can accept advance payments.
schmidtbob
Returning Member

Can I deduct both 2017 and 2018 real estate taxes in 2017 by prepaying a guesstimated 2018 bill.

I have heard that the new tax bill, if signed, does not allow prepaying real estate taxes in 2017.  Does anyone know whether this is correct?

Can I deduct both 2017 and 2018 real estate taxes in 2017 by prepaying a guesstimated 2018 bill.

I just answered that in the question you posted:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4144768-prepaying-real-estate-taxes-in-2017">https://ttlc.intuit.c...>

Can I deduct both 2017 and 2018 real estate taxes in 2017 by prepaying a guesstimated 2018 bill.

Update: The IRS released new guidance on this issue at the end of December after the new tax law was passed.  

Prepaid property taxes are only deductible if they are actually assessed -- that is, the town or county has issued a legally binding warrant to collect property taxes.  Property taxes are only deductible if they were paid after being assessed.  If you made a payment in 2017 for a tax "guesstimate" that was not actually assessed, then it is not deductible.  For example, if the assessment date was Friday, December 29, 2017 with a normal payment due date of February 15, 2018, then the taxes would be deductible on your 2017 tax return only if paid on December 29, 30, or 31. If the assessment is dated January 15, 2018 with a payment due date of February 15, 2018, then the property taxes are not deductible if prepaid in 2017 because the taxes were legally assessed and owed at the time the payment was made.


And the payment must actually be made in 2017 -- for example, mailing a check in December that is post-dated to January doesn't count.

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