Sold my home in Dec06. I paid 4k during the yr and 4.2k to the buyer at closing. Can I claim both on taxes?

Question

I paid $2,000 in July and $2,000 in Sept for real estate taxes. I then sold the home in December of the same year. At closing, the prorated tax I paid to the buyer was $4,200. Can I claim both the 4k I paid the county and $4,200 I paid the buyer on my Sched ule A Line 6 tax form ($8,200 in all)? Thanks!

Answer 1

No, you can't! You can only claim your share of the tax bill for the entire year. That will be most of the $4,200 to be sure but you can take the deduction only once. The amounts you paid in Jul and Sept must have been for 2005 property taxes. You can still claim the amounts you paid to the buyer for 2006 property taxes since they are being paid on your behalf.

Answer 2

If you were paying taxes at closing, those are different than the taxes you paid earlier. So you can deduct all those taxes, you paid them, prorated to the day of closing.

It is the buyer who cannot deduct the tax money you gave at closing.