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schmidtbob
Returning Member

Prepaying real estate taxes in 2017.

I have heard that the new tax law (assuming it becomes law) does not allow prepaying future real estate taxes in 2017 in order to get an additional deduction since beginning in 2018 there is a $10,000 cap.  Is that correct?

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Accepted Solutions
TaxGuyBill
Level 9

Prepaying real estate taxes in 2017.

It says State and Local Income tax can not be prepaid to count as a 2017 deduction, but it does not mention Real Estate taxes.

Here is the legal gibberish for that:

"For purposes of subparagraph (B), an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, shall be treated as paid on the last day of the taxable year for which such tax is so imposed.’’


EDIT:  The rule is (and always has been) that the taxes must be imposed on you, otherwise they are not deductible.  If the county has not imposed the tax on you yet, it may not be deductible.  See this link for further information:
https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-a...

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6 Replies
TaxGuyBill
Level 9

Prepaying real estate taxes in 2017.

It says State and Local Income tax can not be prepaid to count as a 2017 deduction, but it does not mention Real Estate taxes.

Here is the legal gibberish for that:

"For purposes of subparagraph (B), an amount paid in a taxable year beginning before January 1, 2018, with respect to a State or local income tax imposed for a taxable year beginning after December 31, 2017, shall be treated as paid on the last day of the taxable year for which such tax is so imposed.’’


EDIT:  The rule is (and always has been) that the taxes must be imposed on you, otherwise they are not deductible.  If the county has not imposed the tax on you yet, it may not be deductible.  See this link for further information:
https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-a...

SteamTrain
Level 15

Prepaying real estate taxes in 2017.

.....of course, there is still time for those folks to slip in Real Estate tax prepayments too as not being allowed
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
ramani
New Member

Prepaying real estate taxes in 2017.

Can you post a link?
TaxGuyBill
Level 9

Prepaying real estate taxes in 2017.

SteamTrain
Level 15

Prepaying real estate taxes in 2017.

page 48 of the document but "labelled" Page 34:

<a rel="nofollow" target="_blank" href="https://www.congress.gov/115/crpt/hrpt466/CRPT-115hrpt466.pdf">https://www.congress.gov/115/crpt/hrp...>
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
rizziello66
Level 1

Prepaying real estate taxes in 2017.

So as long as the nitwits in Washington don't make any changes to the above language, if I pay my 1st quarter 2018 property taxes, which are due 2/1/18, before 12/31/17, I can deduct them on my 2017 Schedule A.
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