Discussion:Property Taxes Pre-Paid

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Revision as of 16:02, 29 December 2006
Solomon (Talk | contribs)
(Regarding 2), [[)
← Previous diff		 Revision as of 16:14, 29 December 2006
Lois (Talk | contribs)
(You are correct.)
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{{ForumReplyPost|UserID=Solomon|Date=29 December 2006|Text=Regarding 2), [[Reg. 1.266-1]].}} {{ForumReplyPost|UserID=Solomon|Date=29 December 2006|Text=Regarding 2), [[Reg. 1.266-1]].}}
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 +{{ForumReplyPost|UserID=Lois|Date=29 December 2006|Text=You are correct. In AZ the April payment is for the balance of the prior year. So paying them today the taxpayer can use the deduction this year. Correct?
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 +On the second item - from the link Solomon pointed me to it appears the tp can elect to deduct the taxes or include them in the building costs. Correct?
 +
 +All interest during construction is capitalized - Correct?
 +TP had to pay interest to an entity for the use of $100,000 to maintain their bank acount minimum balance until construction was completed. Is this interest deductible or capitalized?}}

Revision as of 16:14, 29 December 2006

Discussion Forum Index --> Tax Questions --> Property Taxes Pre-Paid

Lois (talk|edits) said:

29 December 2006
Two questions:

Can a taxpayer pay commercial property taxes for 2007 (in 2006) and deduct them in 2006?

On a different client: Are property taxes paid during construction of the building deductible or capitalized?

Deback (talk|edits) said:

December 29, 2006
In Michigan, the 2007 property taxes aren't billed to taxpayers until July and December 2007. Chances are you are referring to the 2006 property taxes with a due date in 2007.


1) Yes, the taxpayer can deduct the taxes paid in 2006.

2) Property taxes paid during construction of the bldg are deductible in the year paid.

Solomon (talk|edits) said:

29 December 2006
Regarding 2), Reg. 1.266-1.

Lois (talk|edits) said:

29 December 2006
You are correct. In AZ the April payment is for the balance of the prior year. So paying them today the taxpayer can use the deduction this year. Correct?

On the second item - from the link Solomon pointed me to it appears the tp can elect to deduct the taxes or include them in the building costs. Correct?

All interest during construction is capitalized - Correct? TP had to pay interest to an entity for the use of $100,000 to maintain their bank acount minimum balance until construction was completed. Is this interest deductible or capitalized?

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