I sold my home (2017) and purchased a new home. In addition to my 2016 taxes (paid 2017), can I deduct the closing tax proration to be paid by the new owners?

[DeepDish]

In Illinois, taxes are paid in arrears.  The buyer received credit for the months when I owned the home.  Is this credit deductible for me and to be added to my already paid property taxes?  The new owners have already paid the first installment tax bill (for 2017, payable in 2018) in 2017 due to the new tax laws.

[PatriciaV · Accepted solution]

It depends. If the credit afforded to the buyers was taken out of your sale proceeds, then you may include those property taxes on your return. However, if that credit had no affect on your payout, then you would not take that deduction.

[DeepDish]

I closed in August.  The credit did reduce my sale proceeds.  The amount of the credit (7+ months) is greater than the first half tax bill which they prepaid.  Is the credit deductible, or only the amount of the tax bill they have prepaid?

[PatriciaV]

The buyers receive a credit for the months when you owned the home, and that credit reduced your proceeds. So you should receive a deduction for the entire credit amount. What the buyers actually paid is not material to your tax return. Just be sure that you don't claim more than eight months that you actually owned the home.