Form 5405 and real estate tax paid

[dyne]

Everyone knows that generally when a home is purchased the buyer is entitled to the pro-rata portion of real estate tax paid for the year of purchase. What may be overlooked is that when a form 5405 is filed with an amended 1040-X return for 2008 to claim the up to 8,000 refund for a first time home purchased during 2009, this deduction could be easily overlooked. In such a situation, the deduction for the pro-rata portion of the real estate tax reported on the settlement statement or other appropriate papers would only be deducted on the 2009 return filed NEXT year. Claiming the $8,000 refund on the 2008 tax returns
confuses the issue.

[Corduroy Frog]

Good Catch Fred

Preparers need to look at closing statements very judiciously, and keep a tickler file for issues that are to be reviewed in succeeding years.