Closing 12/31, tax headache?
I have a closing scheduled for 12/31, since the seller is one of the lucky few who will be impacted by the long-term capital gains tax increase for those making over $200K.
I think it will be a pain to close this day. I'll have to report rental income for one day, and I'll have to pay property taxes for one day (it won't be taken care of by the title co. because we pay property taxes for the prior year).
Can I ask the title co. (assuming the seller agrees) to do the prorating of rents and taxes as of Jan. 1st, and if so, can I effectively leave this property off of my tax return for the year? Or will I have to include it due to the one day of depreciation?