I have a condo that I use as a rental property and i’m in the process of doing my taxes. I have a question regarding the property tax expense. I noted on my 1098 form that $1015.36 was paid in property tax for the year. My personal records show I paid $907.12 towards property tax for the year. Which do I use - what is presented on the 1098 form or what my own records show? Hope this makes sense. Thanks in advance for any help.
Use the amount that you actually paid and resolve the discrepancy.
Perhaps your mortgage company paid a full year’s property tax from your escrow account, but you received a seller credit for prorated property taxes on the HUD-1 when you bought the property. In this case, the actual amount you paid out of pocket will be less than the amount shown on the 1098. In this case, your property tax deduction is the 1098 amount minus the seller credit.
You don’t tell us about how you got the number shown in your personal records. Is that the total amount you paid into escrow during the year? If so, then the mortgage company escrowed property taxed based on an estimate from the prior year’s property tax bill. This year, the property tax bill was a little more than the escrow estimate, so the lender paid the difference for you and gave you an escrow analysis that increased your monthly escrow payments to cover the shortfall. In this case, the amount shown on the 1098 is the amount you actually paid and is the amount you should claim as a deduction.
If the amount paid in your personal records is from a property tax bill you received from the county, and your lender paid more, then you have a discrepancy to resolve. Maybe the lender paid the lower amount, but put the wrong amount on your 1098. Maybe the lender paid the wrong amount, and your escrow account is entitled to a refund of the difference.
Regardless of what your records show and what the 1098 says, you can only deduct the actual amount paid.