Things can get complicated when it comes to real estate taxes in the year you buy or sell your home. For example, if you buy the property at a tax sale, you cannot start to deduct property taxes until you receive title to the property under state law (typically following a redemption period).
If you pay the seller’s unpaid back taxes when you purchase the home, you cannot deduct this payment as your taxes. You can add the payment to your basis in the home used for figuring gain or loss when you sell it.
In the year that property is sold, real estate taxes must be allocated between the buyer and the seller. (Generally, this allocation is reflected in your closing papers.)
In the year you sell property, if your share of real estate taxes is paid in advance by the buyer, the lender or real estate broker will generally include this information on Form 1099-S, Proceeds from Real Estate Transactions. But this form is not required to be filed for all sales, so you should keep track of this information (check your settlement papers).
During 2008, 57.8% of all individual 2007 income tax returns were e-filed. While there was a 19% increase in returns filed, there was a 30% increase in those that were e-filed. While the total number of returns filed during the past decade has increased by 23%, the number that has been e-filed as increased by 206%!
Source: IRS.View all factoids