Taxes

[KPH8021]

I recently sold a flip house. The property taxes were prorated from the previous year bill. The contract requires that the proration be adjusted once the tax bill is available. This generally means I pay my portion to the County and they pay theirs for tax return purposes. The new owners pd the bill in full and are now asking for the reimbursement of my portion. In doing so, they are making it look like I made more money than I actually did and they get full credit for the tax deduction. Do I need to complete a 1099 Misc in order to adjust my income and get credit for my portion of property taxes paid?

[Hal_Al]

Q.  Do I need to complete a 1099 Misc?

A.  No. Just make the adjustments on your own tax return.

In TurboTax (TT), you will be asked about expenses of sale.  Enter it there to adjust your capital gain. 

How you take the tax deduction depends on how you are reporting the gain;  capital gain or business profit.* If a capital gain, enter again at itemized deductions to get the real estate tax deduction.

*For more info, in making that determination, see a similar question at: https://ttlc.intuit.com/questions/3399983-tax-issues-regarding-flipping-of-a-house 

And references at:

https://www.hrblock.com/tax-center/income/real-estate/flipping-houses-taxes/

https://fitsmallbusiness.com/taxes-on-flipping-houses/  https://www.lendinghome.com/blog/how-to-maximize-house-flipping-tax-benefits/

[KPH8021]

Thank You.