The Lawyers.com Law Forums will be shutting down on June 30, 2017. We encourage you to resolve any outstanding discussions prior to that time. If you have any questions about this change, please email info@martindale.com.

Can the seller deduct full Tax Credits in the HUD-1?

Previous | Next
 rated by 0 users
Latest post Sun, Mar 6 2016 8:26 AM by adjuster jack. 5 replies.
  • Fri, Mar 4 2016 1:57 PM

    • The_Asker
      Consumer
    • Not Ranked
    • Joined on Sat, Jul 11 2015
    • IL
    • Posts 8

    Can the seller deduct full Tax Credits in the HUD-1?

    I sold my house back in Feb 2015 (IL). The HUD-1 Seller Column Line 513 2014 Tax Credit shows $7000, and line 514 shows $1000 (for Jan and Feb 2015). Rows 213 & 214 on Buyers side show the same amounts. My question is: Can I deduct the full $8000 amount in my 2015 tax return?

    I am using Turbo Tax, for my particular situation everything is fairly straigh forward but this section. The only proof I have that I paid this amounts is the HUD-1 itself. I did not receive any bill for it neither the 1098 form, but it was already paid.

    Thanks for your help!

     

     

     

  • Sat, Mar 5 2016 10:05 AM In reply to

    Re: Can the seller deduct full Tax Credits in the HUD-1?

    The_Asker:
    I sold my house back in Feb 2015 (IL). The HUD-1 Seller Column Line 513 2014 Tax Credit shows $7000, and line 514 shows $1000 (for Jan and Feb 2015). Rows 213 & 214 on Buyers side show the same amounts. My question is: Can I deduct the full $8000 amount in my 2015 tax return?

    No.

    You only paid the tax for Jan and Feb. Your deduction is the $1000.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Sat, Mar 5 2016 11:19 AM In reply to

    • The_Asker
      Consumer
    • Not Ranked
    • Joined on Sat, Jul 11 2015
    • IL
    • Posts 8

    Re: Can the seller deduct full Tax Credits in the HUD-1?

    Thank you!, it sounds "right" to me. Otherwise the current owner may not deduct 2014. However, I quite do not understsnd the logic. I did live there 2014, and I paid for it at the sale date, but I cannot dedut it. I do not remember if I deduct those taxes 15 years ago when I got the house. I assumed I did it!

    Thanks! 

  • Sat, Mar 5 2016 10:59 PM In reply to

    Re: Can the seller deduct full Tax Credits in the HUD-1?

    I think I see where your confusion is.

    It's the estimated property tax for 2015 that was pro-rated on the HUD-1.

    The tax return you prepare now for the 2015 tax year would only have a deduction for your pro-rated share for the 2 months of 2015 that you still owned the house.

    The tax return you prepared in 2015 for the 2014 tax year would have had the full deduction for the property tax paid in 2014.

    Whether that's how it worked out depends on when you paid the property tax for what year.

    Example: My 2015 property tax was due half in Oct 2015 and half in March 2016. I take the deduction in the year I pay it so my 2015 return wouldn't show the full amount of 2015 property tax, it would show the Oct 2015 payment and the March 2015 payment. The March 2016 payment would go on my 2016 tax return that I prepare in 2017.

    Now let's say I sold my house last month, Feb 2016 before paying the balance on the 2015 property tax. The HUD-1 would show me paying that amount into escrow plus the pro-rated amount for Jan and Feb 2016.

    In your case, if you paid all of your 2014 property tax prior to the end of 2014, then your tax deduction would have been on your 2014 tax return that you filed in 2015.

    The pro-rated amount of the 2015 property tax (apparently the $1000) would go on the 2015 return that you are preparing now.

    On the other hand if, by the sale date, you had not paid anything toward the 2014 property tax then you would have had to put the full amount of the 2014 property tax into escrow plus the 2 months of 2015's property tax and you would get the deduction for the full 14 months property tax on your 2015 return that you are preparing now.

    If that doesn't clear things up let me know.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Sun, Mar 6 2016 6:09 AM In reply to

    • The_Asker
      Consumer
    • Not Ranked
    • Joined on Sat, Jul 11 2015
    • IL
    • Posts 8

    Re: Can the seller deduct full Tax Credits in the HUD-1?

    Yes, you are right. I understand now. I used to pay for house taxes one year behind, so in 2015 (June and Dec) I had to pay the full amount of 2014, and  in 2016 I would have paid the full amount of 2015. The scrow account had that money deposited by me in instalments. So, I sold my home at the end of February 2015, then I did pay for the whole 2014 and Jan & Feb 2015 as the split shown in the HUD-1.

    So, the buyer only has to include March to Dec in his return. The actual amount paid by him, but not shown in the HUD-1.

    I got it! A huge thanks, my refund just increased 1200+.

  • Sun, Mar 6 2016 8:26 AM In reply to

    Re: Can the seller deduct full Tax Credits in the HUD-1?

    The_Asker:
    my refund just increased 1200+.

    Your government thanks you for the interest free loan.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
Page 1 of 1 (6 items) | RSS

My Community

Community Membership New Users: Search Community