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I own several pieces of property and cannot get my CPA in the last few days. My property taxes alone are very expensive notwithstanding mortgage interest, etc. I know there is a $10,000 limit but is it for all properties or each property?
If any of your properties generate farm or rental income, the mortgage interest goes separately on a separate schedule (Sch E or F).
Non-income producing properties go on your Sch A (I think). The $10,000 cap doesn't start until you file your 2018 return.
If any of your properties generate farm or rental income, the mortgage interest goes separately on a separate schedule (Sch E or F).
Non-income producing properties go on your Sch A (I think). The $10,000 cap doesn't start until you file your 2018 return.
I know but there's so much talk about prepaying taxes before Jan 1 to save on 2018 taxes. That is my real concern. They are paid for but the property taxes are very high.
prepaying is to save on taxes period, not 2018 taxes. The concept is if you'll have more than $10k in state and local income taxes (or sales tax) anyway, then your real estate tax deduction won't do you any good in 2018. So if you pay it now and deduct it in 2017, you'll at least get some federal tax benefit out of it.
Again, this is only for property taxes that are deducted on Schedule A. You also need to watch out for AMT in 2017 (since taxes aren't deductible for AMT purposes) and you also need to see if your taxing authority will accept payment of 2018 taxes now.
prepaying is to save on taxes period, not 2018 taxes. The concept is if you'll have more than $10k in state and local income taxes (or sales tax) anyway, then your real estate tax deduction won't do you any good in 2018. So if you pay it now and deduct it in 2017, you'll at least get some federal tax benefit out of it.
Again, this is only for property taxes that are deducted on Schedule A. You also need to watch out for AMT in 2017 (since taxes aren't deductible for AMT purposes) and you also need to see if your taxing authority will accept payment of 2018 taxes now.
Also if you currently itemize but will likely take a standard deduction in 2018.
It is a $10,000 cap per person, not per property. People are lining up to pay their 2018 property taxes in advance before Jan 1st. You may want to consider doing the same as next year you will be screwed. If you have the cash on hand.
It is a $10,000 cap per person, not per property. People are lining up to pay their 2018 property taxes in advance before Jan 1st. You may want to consider doing the same as next year you will be screwed. If you have the cash on hand.
THe irs just put guidance that prepaying 2018 property tax before the property assessed for 2018 will not be deductible for 2017 income tax purposes
THe irs just put guidance that prepaying 2018 property tax before the property assessed for 2018 will not be deductible for 2017 income tax purposes
Just to clarify.....2018 property taxes can be deducted in 2017 if assessed and billed as part of your tax bill. In my case I am able to pay my first 2 quarters of 2018 property taxes in 2017 because they show on the tax bill I was sent (my taxes are billed July - June so they show 2017 3Q & 4Q taxes as well as 1Q & 2Q of 2018 (also shows 2018 3&4 Q but those are estimates not set payments). Already confirmed with my tax office as well as mortgage co (who pays my taxes through escrow). I had to add some additional funds to my escrow via ACH transfer to equal the first 2 quarter payments of 2018.
Therefore, I can deduct all of 2017 property tax (4 quarters) and half of 2018 (first 2 quarters) on my 2017 return. Also confirmed this with my CPA.
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Quote:
Originally Posted by SuiteLiving
The $10k limit is for itemized deductions. The treatment of your rental properties won't change.
Yes, rental prop taxes (100% offset to rental income) are totally different than your personal residence Property taxes ('deduction' is only a slight benefit off your marginal tax rate) I/e you spend far more to get it, than it's benefit.
Quote:
Originally Posted by MrLemon
Also if you currently itemize but will likely take a standard deduction in 2018.
I doubt it... IIRC $24,400 proposed Std Ded (2 filers joint) is much less than 1/2 my average itemized deductions (and I am not wealthy) just an average hourly wage grunt (retired / W/o Pension).
I doubt it... IIRC $24,400 proposed Std Ded (2 filers joint) is much less than 1/2 my average itemized deductions (and I am not wealthy) just an average hourly wage grunt (retired / W/o Pension).
With the $10,000 per household cap, it'll be much more the case among those who have paid off the mortgages (as my spouse and I have) than you may think.
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