Are prorated property taxes paid at closing on a rental part of basis or a deduction?

Forum|Forum|3 years ago
April 11, 2023
2 replies
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I don’t think it can be both

TurboTax Online

Mike9241

technically it can be both. the IRS say that you can only deduct the portion of taxes for the period you own the property so if there's a proration that doesn't match up with the actual period of ownership basis should be adjusted. see the section on deductible real estate taxes - same rules apply to rental and personal residence.

https://www.irs.gov/publications/p530

ThomasM125

The property taxes are not added to the basis of the property. They are a rental expense to be deducted against rental income. You will see an option for that when you set up the rental in TurboTax, where you enter the rental expenses.

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