I sold my house this month, and I qualify for 100% home sale tax exclusion.
At closing, I got pro-rated credit for portions of the school tax I due and paid last September, and the county/town tax due and paid this January. I took the standard deduction for 2019, but I expect to itemize deductions when I make out my 2020 return. I don't expect to hit the $10,000 SALT limit.
Let me make up some numbers, to make the question easier.
School tax $2400 paid 9/2019, $1000 credited at closing County tax $1800 paid 1/2020, $1350 credited at closing
Must I reduce my 2020 property tax deduction by the amounts returned to me when selling my house?
(a) The $1000 portion of tax paid in 2019, since I took the standard deduction in 2019? (I assume this answer is No.) (b) The $1350 portion of tax paid in 2020, when I itemize deductions in 2020?
I know 2020 taxes are a long way away, but this makes a difference to me now because I have to pay estimated taxes this year.
(c) Out of idle curiosity, what if I had itemized in 2019 instead of taking the standard deduction? Would there be any recapture of the $1000 credited against property tax paid in 2019?