Can I claim the property taxes I paid at closing listed as initial escrow payment + the taxes I paid on the 1098 I received?

[gmfische1]

I bought a house in August 2016.  At closing I paid 236.17 listed as property taxes and I paid 2278.87 as county property taxes.  These are listed under initial escrow payment for 11 months.  I also paid 403.68 homeowners insurance(4 months) under same listing.  However, the amount on my 1098 does not show this amount. Can I claim  these amounts in addition to what is listed on my 1098.  Also, I paid 1211.02 homeowners insurance premium listed under prepaid (12 Months).  Can I claim this as well?

[MichaelMc · Accepted solution]

No. The initial escrow payment is a cushion that you pay to the lender or mortgage servicer in anticipation of upcoming tax and insurance bills. It prevents your escrow account from going negative when your mortgage servicer has to pay an annual or semi-annual tax bill only a few months into your mortgage.

The amount paid at closing is not a tax deduction. Over time, as the mortgage servicer actually pays the the tax bills, the money that you paid into the escrow account for property taxes gets disbursed and becomes a tax deductible expense; that is the amount reported to you on Form 1098.

[abhinavg]

Are the property taxes paid by me to the seller at closing tax deductible even if they are not listed on the 1098? Any reference to this as per the IRS rules?

[tlrandolph]

I am looking for an answer to this as well. Are the property taxes paid by me to the seller at closing tax deductible even if they are not listed on the 1098?

[suzyquzy]

Yes they are deductible.

[madlix18]

This is another question and answer on your site.  Which is correct?


I closed my house in October 2016. On my closing statement, there's an item " Initial Escrow Payment at Closing: property taxes for 9 months. $4050"
However, 1098 only shows $1095 was paid in 2016 for property taxes. What should I report on TT?

You should report both the amount of property taxes that were paid at closing and the amount paid through the escrow account on your mortgage.

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TurboTaxAmyT
 TurboTax TaxPro  2 years ago

[madlix18]

This is another question and answer on your site.  Which is correct?


I closed my house in October 2016. On my closing statement, there's an item " Initial Escrow Payment at Closing: property taxes for 9 months. $4050"
However, 1098 only shows $1095 was paid in 2016 for property taxes. What should I report on TT?

You should report both the amount of property taxes that were paid at closing and the amount paid through the escrow account on your mortgage.

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Default user avatars original
TurboTaxAmyT
 TurboTax TaxPro  2 years ago

[TomD8]

The property seller is responsible for - and can deduct - the property tax amount that covers the period up to, but not including, the date of closing.  The property buyer is responsible for - and can deduct - the property tax amount that covers the period from the date of closing forward.  This is true regardless of who makes the actual payments.  And it's because you cannot deduct property taxes unless you are the property owner.