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randefrank
New Member

I bought a house and sold a house and am trying to figure out how to deduct the property tax

I moved from Iowa to Florida.  We bought a house in Florida and claimed Florida residence in July 2016.  Our house in Iowa sold in September 2016.  At closing on the Iowa house we owed $12k in taxes that brought the house up to date for 2015 and 2016.  We are also not sure if we paid taxes on the new house at closing in July.  How should we go about entering the property taxes for these 2 houses in our tax return?
1 Reply
SherryM
New Member

I bought a house and sold a house and am trying to figure out how to deduct the property tax

Unless it was an investment property (and did a 1031 exchange), the fact that you used the proceeds to purchase a new home doesn't matter for tax purposes.  If the home was sold while you were single, you may qualify for a home sale exclusion if you lived in it 2 of the last 5 years.

If your home sale must be reported, then you can report your share of the sales price and expenses.

If all of the following apply, you don't need to report it.

    You lived in the home as your main home for at 2 of the 5 years preceding the sale.
    Your "net" profit from the sale is less than $250,000 ($500,000 if Married Filing Jointly).
    You didn't take depreciation deduction on the home or use it for business during the time you owned it.
    You didn't rent it out at any time that you owned it.
    You didn’t receive a Form 1099-S.

Where to enter the sale of your home  (if required) in TurboTax: While inside the software and working on your return, type sale of home in the Search at the top of the screen (you may see a magnifying glass there).  There will be a popup that says Jump to sale of home.  Select that to get to the general area.


HOME PURCHASE

You can deduct any interest, property taxes, and most mortgage insurance premiums that are reported on the Form 1098 Mortgage Interest statement.  You can also deduct any interest or property taxes from the settlement statement that are not already reported on the Form 1098 and not "pre-paid" and held in escrow. 

Additionally, you can deduct qualified points paid on a mortgage and qualified mortgage insurance premiums. (Points can also be called loan origination fees, maximum loan charges, discount points, or loan discount.)

Where do I enter my 1098 mortgage interest statement?

    Here's how to enter your 1098 mortgage interest statement in TurboTax:

    If you're using the TurboTax Mobile App, follow these instructions.

    Othewise, follow these steps:

        Open your return in TurboTax.
        (To do this, sign into TurboTax and click the orange Take my to my return button.)
        Search for “1098” in the search box and then click the "Jump to" link in the search results.
        Answer Yes to Did you have any home loans in 2016?.
        Type in the name of your mortgage company on the Enter your mortgage lender screen. Click Continue.
        Make your selection on the Do any of these uncommon situations apply? screen, then click Continue.
        Follow the onscreen instructions to enter the rest of the information on your 1098 form.

    If you think your 1098 may not include amounts you paid for PMI, property taxes or other items, contact your lender.

    If your property/real estate taxes that you paid aren’t listed on your 1098, you’ll enter them separately as property/real estate taxes. But, any points or insurance will be entered in the 1098 section of TurboTax.

    If you need help reading your closing statement, contact your real estate broker or loan broker, who will be familiar with your particular situation.

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