Confusion about pre paying real estate taxes

I heard on the news yesterday that according to the new tax law the IRS will not allow pre paid RE taxes to be deducted on 2017 tax returns unless the property was actually assessed in 2017 for the 2018 taxes.

Is that right? My RE taxes run from June 31 - July 1, of each year. I have already received the bill for taxes due on Jan. 31, 2018 and April 31,2018. The property asessement is on the bill.

If I pay these two quarters before the end of 2017 will it be deductible on my 2017 return?

This is so confusing!

Thanks for the help.

Reply to
Jane
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Yes. You summarized it perfectly. As long as the tax was assessed, i.e. you were given the exact numbers, you are good to go.

Reply to
JoeTaxpayer

If you have received the bill for taxes due in 2018 and pay it in 2017, you can probably take the deduction in 2017. The IRS Advisory from Wednesday (Google IR-2017-210) uses an "if Assessed and Paid in 2017" test. In your case the receipt of the bill should prove the "if assessed" part so you now need to get the bill paid in 2017.

The more interesting case is when a taxpayer doesn't yet have a bill. For example, my Property Tax bill shows at least

6 government units (City, County, Schools, others) that assess Property taxes. If some of these government units complete the process of assessing taxes on my property in 2017 and others don't finish until until 2018, in theory I can pay and deduct the taxes that were assessed in 2017 and not deduct the taxes not yet assessed? Even if all the taxes were assessed in 2017, estimating the correct amount to pay without a bill is a non-trivial tax. YUCK!!
Reply to
BignTall

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