impound account and property tax deduction

Taxes General Forum - Tax professionals meeting place and answers to queries. (Moderated) 

Yahoo!   Google   Windows Live   del.icio.us   digg   Netscape

Subject Author Date impound account and property tax deduction removeps-groups@yahoo.com 08-27-2009  Re: impound account and property tax deduction Bill Brown 08-27-2009  Re: impound account and property tax deduction Alan 08-27-2009  Re: impound account and property tax deduction Drew Edmundson 08-28-2009  Re: impound account and property tax deduction Alan 08-28-2009  Re: impound account and property tax deduction Stuart A. Bronstein 08-28-2009  Re: impound account and property tax deduction Drew Edmundson 08-28-2009  Re: impound account and property tax deduction removeps-groups@yahoo.com 08-27-2009
Posted by removeps-groups@yahoo.com on August 27, 2009, 3:12 pm Please log in for more thread options Is the full amount you pay into a property tax impound account deductible? Say you want to pay this year's and next year's taxes now in order to get a deduction because you expect to be in AMT next year. If you pay your taxes directly to the county then you deduct the full amount paid. But if you pay 15 months of property tax into an impound account, I imagine the impound account managers will collect interest on the money and pay the county every 6 months. And is there a limit on how much you can pre-pay? What if I wanted to pre-pay 10 years worth of property tax? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bill Brown on August 27, 2009, 3:26 pm Please log in for more thread options On Aug 27, 3:12 pm, "removeps-gro...@yahoo.com" <removeps- gro...@yahoo.com> wrote: > Is the full amount you pay into a property tax impound account > deductible?  Say you want to pay this year's and next year's taxes now > in order to get a deduction because you expect to be in AMT next > year.  If you pay your taxes directly to the county then you deduct > the full amount paid.  But if you pay 15 months of property tax into > an impound account, I imagine the impound account managers will > collect interest on the money and pay the county every 6 months. > If by "impound" account you mean something like an escrow account maintained by a mortgage holder, the answer is no. What you deduct is what the impound custodian transfers to the taxing authority. > And is there a limit on how much you can pre-pay?  What if I wanted to > pre-pay 10 years worth of property tax? > A cash basis taxpayer can pay real estate taxes one year in advance and thereby get a deduction for two years of payments on one federal income tax return. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on August 27, 2009, 4:41 pm Please log in for more thread options Bill Brown wrote: [snip] > >> And is there a limit on how much you can pre-pay? What if I wanted to >> pre-pay 10 years worth of property tax? >> > A cash basis taxpayer can pay real estate taxes one year in advance > and thereby get a deduction for two years of payments on one federal > income tax return. > The only way to get a deduction for two years of property taxes in one year is if you are past due on your taxes. Otherwise, you can only get a deduction for 1.5 years. This would include the 2nd payment made in the spring for the last fiscal year and the full year payment in the winter for the current fiscal year. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Drew Edmundson on August 28, 2009, 10:22 am Please log in for more thread options >Bill Brown wrote: >[snip] >> >>> And is there a limit on how much you can pre-pay? What if I wanted to >>> pre-pay 10 years worth of property tax? >>> >> A cash basis taxpayer can pay real estate taxes one year in advance >> and thereby get a deduction for two years of payments on one federal >> income tax return. >> >The only way to get a deduction for two years of property taxes >in one year is if you are past due on your taxes. Otherwise, you >can only get a deduction for 1.5 years. This would include the >2nd payment made in the spring for the last fiscal year and the >full year payment in the winter for the current fiscal year. That depends on your state. Here in NC the tax is due annually in September but not late until January 5th. So you can easily pay two years of tax in the same year. Pay 2009 tax in January 2010 and 2010 tax in 2010. Drew Edmundson, CPA Cary, NC -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on August 28, 2009, 11:33 am Please log in for more thread options Drew Edmundson wrote: > >> Bill Brown wrote: >> [snip] >>>> And is there a limit on how much you can pre-pay? What if I wanted to >>>> pre-pay 10 years worth of property tax? >>>> >>> A cash basis taxpayer can pay real estate taxes one year in advance >>> and thereby get a deduction for two years of payments on one federal >>> income tax return. >>> >> The only way to get a deduction for two years of property taxes >> in one year is if you are past due on your taxes. Otherwise, you >> can only get a deduction for 1.5 years. This would include the >> 2nd payment made in the spring for the last fiscal year and the >> full year payment in the winter for the current fiscal year. > > That depends on your state. Here in NC the tax is due annually in > September but not late until January 5th. So you can easily pay two > years of tax in the same year. Pay 2009 tax in January 2010 and 2010 > tax in 2010. > > Drew Edmundson, CPA > Cary, NC > You are correct. There are some jurisdictions on the one payment method that bill before calendar year-end and allow you to pay without penalty in the next year. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted How to account for the Loss on rental property March 17, 2008, 2:07 pm Property tax deduction? (non-rental) April 13, 2008, 10:48 am HELOC deduction for rental property April 10, 2008, 10:52 pm Rental property mortgage interest deduction May 1, 2007, 7:12 pm form 706 martial deduction\community property October 29, 2008, 3:50 pm Charitable Deduction of Inherited Real Property October 30, 2009, 12:28 am Owner Occupied Rental Property- deduction loss April 30, 2008, 5:34 pm ending capital account does not match beginning capital account April 6, 2009, 11:49 am Question about land and property basis for a rental property January 18, 2007, 4:01 am Transfer of 457 Account September 14, 2008, 12:05 pm