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brumest6
New Member

Im buying a house in January of 2017 can I claim the taxes I paid on the the house in 2016 taxes

 
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Opus 17
Level 15

Im buying a house in January of 2017 can I claim the taxes I paid on the the house in 2016 taxes

No either way.

First, if you close in 2017, you won't have paid anything in 2016.

Second, when you close there is usually an adjustment on your closing statement for taxes that were prepaid by the previous owner.  For example, if the previous owner paid property taxes in July for the period July 1, 2016 through June 30, 2017, and you buy the house in January, you will owe an adjustment credit to the seller for about half the year's taxes. (January through July) that the seller paid that apply to the period you will own the house.  Those taxes are deductible on your 2017 tax return as if you paid them directly to the city or county.  But you can't claim them on your 2016 tax return because you haven't paid them yet.

Even if the seller owes back taxes, and you end up paying property taxes for 2016 when you close in 2017, you can only take a deduction for the portion of property taxes that apply to when you owned the home.  Taxes you pay that apply to when someone else owned the home are never deductible, but they are added to your cost basis (the price you paid) and may reduce your capital gains when you sell.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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3 Replies
Critter
Level 15

Im buying a house in January of 2017 can I claim the taxes I paid on the the house in 2016 taxes

You claim RE taxes in the year they are paid.   Pay them in 2016 deduct them in 2016.
TomYoung
Level 13

Im buying a house in January of 2017 can I claim the taxes I paid on the the house in 2016 taxes

If you bought a house in 2017 I don't understand how you'd end up paying "2016" taxes.  Usually property taxes are prorated between the buyer and the seller with the seller paying taxes up to the point of the sale and the buyer paying the taxes there after.

If the seller paid taxes covering the 2016-2017 fiscal year the buyer might reimburse the seller as part of the "close of escrow" process, but those taxes would be deducted in 2017 when they were paid.
Opus 17
Level 15

Im buying a house in January of 2017 can I claim the taxes I paid on the the house in 2016 taxes

No either way.

First, if you close in 2017, you won't have paid anything in 2016.

Second, when you close there is usually an adjustment on your closing statement for taxes that were prepaid by the previous owner.  For example, if the previous owner paid property taxes in July for the period July 1, 2016 through June 30, 2017, and you buy the house in January, you will owe an adjustment credit to the seller for about half the year's taxes. (January through July) that the seller paid that apply to the period you will own the house.  Those taxes are deductible on your 2017 tax return as if you paid them directly to the city or county.  But you can't claim them on your 2016 tax return because you haven't paid them yet.

Even if the seller owes back taxes, and you end up paying property taxes for 2016 when you close in 2017, you can only take a deduction for the portion of property taxes that apply to when you owned the home.  Taxes you pay that apply to when someone else owned the home are never deductible, but they are added to your cost basis (the price you paid) and may reduce your capital gains when you sell.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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