How to report Real Estate Tax refund pro rated after sale of home?

[ohmomx3]

We sold our MD home at the end of March 2023. The real estate taxes for the first half 2023 were billed and paid from escrow prior to 12/31/2022. When we sold our home, we got a prorated refund of the difference we had paid ahead for April-June 2023. How do I enter that refund on the 2023 1040? As a negative number since the entire amount was paid and claimed in 2022. We purchased another home in PA at the same time so I have real estate taxes paid at closing and later in 2023 as well. Can I just lump all these amounts together?

[RachelW33]

Yes, if you itemized your deductions in 2022 and will do so in 2023, lumping the amounts together will be the easiest way to handle the situation.

Keep in mind, if you did not itemize in 2022, you do not need to worry about the refund of the real estate taxes received at settlement.  In addition, if you itemized in 2022 but do not itemize in 2023, the refund of the real estate taxes will need to be reported as "Other Income" on your return.

[ohmomx3]

Thank you so much! Other income it is!