Discussion:Financed RE Taxes
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Discussion Forum Index --> Basic Tax Questions --> Financed RE Taxes
Discussion Forum Index --> Tax Questions --> Financed RE Taxes
| 17 June 2008 | |
| Client refinanced their home in 2007, receiving 46,632 in cash. The total amount of the refi was 175500. They paid off a loan from the same lender & another. Included on page 2 settlement charges to borrower are RE taxes. Clearly they were financed. I am trying to find the citation regarding the deductibility of the financed RE taxes, but I cannot locate it. Does anyone know what that might be? | |
| 17 June 2008 | |
| The deduction for property taxes takes place when the taxing authority is paid not when an amount of money is placed into an escrow account for the purpose of funding the ultimate payment. -- Larry Hess, CPA | Albuquerque, NM | Talk to me | |
RoyDaleOne (talk|edits) said: | 18 June 2008 |
| You can deduct the R/E Taxes if they were paid from the loan proceeds. | |
| 18 June 2008 | |
| There is no way that you can claim a deduction for amounts paid into an impound account. Wait until the lender pays the tax collector. | |
| 18 June 2008 | |
| I think you are saying that a line item on the HUD-1 was payment of taxes to the county tax collector, correct? As RoyDaleOne stated, just because the funds were from the loan proceeds doesn't make the payment non-deductible. It frankly doesn't matter where the money comes from as long as it is paid to the county. If to an escrow, as others have also stated, not a deduction until the tax collector receives the funds from escrow. | |
| 19 June 2008 | |
| being the tech-savy person that he is....client kept everything on their computer & discarded originals. being the somewhat lazy person we all can be at times, he didn't back it up. Thus he was certain that the amounts on page 2 were the amounts paid, though it was obvious that it could not be. Upon further discussion, I learned that the amounts were deposited into an escrow account and he is obtaining the statements from the lender(s). | |
| 20 June 2008 | |
| also, if there are funds disbursed to third parties, other than realtors, closing attorney/title co or insurance companies, it will usually be at the bottom of page 2, not in the center where pre-paids are calculated.
For example, if taxes were past due at the date of the closing, the payment of the past due taxes would be listed in Section 1300. Additional Settlement Charges | |
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