We bought a house in Minnesota last year. Should we be getting a form for property tax deduction purposes?

Question

We bought a house last year (our primary residence) in the fall. We bought about halfway through a six-month property tax cycle. (I don't know how other states are, but in Minnesota, people pay property tax for the first half of the calendar year and the second half of the year.) At the closing, we reimbursed the sellers for our portion of the July-Dec 2006 property tax, which was several hundred dollars. However, besides a line on our closing forms that notes the amount paid to reimburse the sellers for property tax, I have no form that acknowledges what we paid for property taxes. So, are we legally entitled to deduct the property tax we paid? Also, does the government (state or county) need to send us a form, or is the official closing document that states the property tax reimbursed to the seller sufficient for safely itemizing that amount? (Our deductions exceed the standard deduction by several thousand dollars, so we are definitely itemizing.)

Answer 1

Your receipts or canceled checks for the property taxes are sufficient proof to claim the deduction.

The amount on the closing statement for your share of the apportioned taxes in the year of the purchase is sufficient proof for what you paid as well.

Ditto for any amounts on your annual reconciliation statement from the mortgage servicing company as paid to the taxing authority.

Answer 2

The portion of property tax that you paid at closing is deductible to you if you Itemize your deductions rather than take the standard deduction. If you are paying your property tax via an escrow acct with your mortgage co, then you should receive a form 1098 which will show the amount of Mortgage Interest paid, and Points paid and any amount of Property Tax you paid.
When you receive the 1098 if you have any questions call the IRS at 1-800-829-1040 they have Tax Law assistance that can guide you thru this and help you to determine what is more beneficial to you, how to report it, what forms you need etc.

Answer 3

In addition to the amount on your closing statment, if you have a mortgage, whatever taxes the bank paid will be on your year-end statement. If you don't have a mortgage, It'll be whatever you paid to the taxing authority directly. Taxing aurthorities generally don't send out statements on taxes paid. However, you can request one. And yes, the closing statement is sufficient documentation to take the deduction.