Closed on 06/30/2016
I paid full taxes, X, in December 2016 for tax year 2016
Sellers pro-rated portion of 2016 taxes, Y, reduced closing costs. Note: pro-ration was not correct in the Sellers favor, but as I read the tax rules it does not matter when determining how much can be deducted.
If I understand correctly, I DO NOT get to deduct X (total tax) - Y (sellers portion at closing)
Instead, I can deduct 185 / 366 * X, where 185 is the number of days in the home including the closing date, and X is the full tax amount.
Does this part seem correct?
Closed on 07/13/2016
Pro-rated portion of 2016 taxes was subtracted from my bottom line at closing. Note: Again, the pro-ration was not correct in my favor this time. Seems to be a trend.
As I understand it, I should be able to deduct 194 / 366 * X, where 194 is the number of days in the year I owned the home, and X is the total 2016 taxes.
Here is the kicker: The Buyers did not pay the 2016 taxes until January, 2017.
It seems that I may not be able to deduct my portion of the 2016 taxes on the home sold for the 2016 tax year. Does this seem correct?
If not, can I deduct my portion of the 2016 taxes in the 2017 tax year?
Thanks for any help.