1st Year Pay Property Taxes in 2017 or next?

[Thurman Schweitzer]

Ok, I purchased 2 new properties in August.  After rehab and lease up activities, they are positive cash flowing now in November.  In Texas property taxes are due on Receipt but not late until Jan 31st next year.  My question is with such a small revenue period am I better off waiting on paying taxes next year and then again in December to "double dip" on that expense? 

[Dave Toelkes]

@Thurman Schweitzer, with the prorate you are only out of pocket for the balance of the tax year.  Which means that you can only take a deduction for the actual amount of taxes you paid out of pocket.  You can not claim a deduction for the amount the seller paid for you.  

Given this new information, it probably won't make much of a difference for your 2018 tax return. Suggest you pay the 2017 tax bill this year so it will not show up on your 2018 tax return as a double dip and be counted against your DTI for any investment financing you want to do in 2019.

From your comments, I am guessing that you will have a net loss for your rental activity in 2017.  If your tax bracket rate will not change, then it probably makes no difference in your total tax liability what you do.  If, after depreciation, you expect to have a net passive loss next year AND if you will have a lower tax bracket rate under the tax reform proposal, then paying your property tax this year will be better than paying twice next year.