I bought my home in April 2017 and was given a property tax credit at closing for taxes from Jan 2016 to April 2017. What tax can I deduct in 2017, if any?

[zhelson]

Property taxes are assessed for the previous year. 2017 taxes paid are for 2016 assessment. Tax payments are due June 1 and September 1. I bought my home in April 2017. At the closing in April 2017 the seller provided a tax credit for Jan 2016 to April 2017. The first installment was paid by the title company. The second installment was paid by my lender (thru escrow) in September 2017. 

[Rachel_W]

You can deduct the Property Taxes that were paid by your Lender in September 2017 less the Property Tax Credit you received at Closing.  This deduction will be reported on your Schedule A.

Check out the TurboTax FAQ below for more details about deducting Property Taxes on Schedule A:

https://ttlc.intuit.com/replies/3300663

[zhelson]

Isn't it wrong to take a deduction for property taxes when technically I receive a 100% credit for 2016's bill which was paid in 2017?

[Rachel_W]

The deduction is taken in the year it was paid, no matter what year the tax applied to.

[zhelson]

So I can deduct approximately 8 months of property taxes in 2017, when I received a 16 month credit?

[Rachel_W]

You should reduce the amount paid by your lender in Sept 2017 by any Property Tax Credit you received at Closing. If the amount is less than zero (meaning you actually received more back as a credit at settlement than you paid in 2017) than do not claim anything for Property Taxes on Schedule A.

[zhelson]

Thank you for all the help. It is much appreciated. Since I receive a credit in excess of what my portion was in 2017, will I need to apply that credit to my 2018 returns when I file in 2019

[Rachel_W]

No, you can only deduct what you actually pay on your 2018 tax returns.

[zhelson]

I appreciate the help, but feel more confused now than before. So I can't deduct any property tax in 2017?

[Rachel_W]

No, not if you were reimbursed more for Property Taxes than you actually paid during 2017.