IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed & Paid

The Internal Revenue Service advised tax professionals and taxpayers today that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances.


The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018.  A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.  State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.

The following examples illustrate these points.

Example 1:  Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017 – June 30, 2018.  On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018.   Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017, and may claim a deduction for this prepayment on the taxpayer’s 2017 return.

Example 2:  County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017 – June 30, 2018.  County B intends to make the usual assessment in July 2018 for the period July 1, 2018 – June 30, 2019.  However, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year.  Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.

The IRS reminds taxpayers that a number of provisions remain available this week that could affect 2017 tax bills. Time remains to make charitable donations. See IR-17-191 for more information. The deadline to make contributions for individual retirement accounts – which can be used by some taxpayers on 2017 tax returns – is the April 2018 tax deadline.

Ige Appoints Interim Director of Department of Human Resources Development

Hawaii Governor Ige appointed Ryker Wada to serve as interim director of the Department of Human Resources Development effective Jan. 1, 2018 following the Dec. 31st retirement of Director James Nishimoto, who devoted over 40 years of his career to public service.

Ryker Wada

Wada has served as deputy director of the department since Dec. 2016. Prior to this he was the Certificated Personnel Regional Officer for the Windward District of the Department of Education (DOE) where he was responsible for human resources and labor relations.

Before joining DOE he served as the Managing Attorney for the Honolulu Office of the Legal Aid Society of Hawaii. Wada earned a B.A. from the University of Washington and a J.D. from the University of California Hastings College of the Law.

Governor Ige Releases $3 Million in CIP Funding for East Hawaii Region

Sen. Ruderman

Senator Russel Ruderman announces the following release of Capital Improvement Funds:

I am pleased to announce that Governor David Ige’s administration has released Capital Improvement Project (CIP) funding for Hawai‘i Health Systems Corporation, to fund construction and equipment costs for renovation, acquisition, and installation of radiology equipment in the East Hawai‘i Region (Hilo Medical Center, Hale Hoola Hamakua, and Kau Hospital).

Amount Released: $3,000,000.

Thank you Governor Ige for your efforts on Senate District 2’s behalf.

Projects such as these are critical components of the public infrastructure and contribute to building a better home for our kupuna, keiki, and all the residents of Hawai‘i.

Hawaii Tourism Authority Issues LGBT Travel Studies for Japan, Taiwan Markets

The Hawaii Tourism Authority (HTA) announced today that two research studies have been issued providing insight on the profiles, preferences and opinions of LGBT travelers from Japan and Taiwan, as it relates to visiting the Hawaiian Islands.

Commissioned by HTA’s Tourism Research Division, the studies were conducted by Community Marketing & Insights, a San Francisco-based firm specializing in LGBT consumer research. The two new studies complete a set of six studies that are the first ever done analyzing LGBT travel to the Hawaiian Islands by the State of Hawaii.

Earlier this year, four studies were issued evaluating LGBT travelers from the United States, Canada, Australia and China.

All six LGBT travel studies are posted online in the Reports Section under Target Lifestyle Segments of HTA’s website at www.HawaiiTourismAuthority.org.

Jennifer Chun, HTA Director of Tourism Research, said the studies on Japan and Taiwan provide valuable information from survey respondents in each country that Hawaii tourism industry partners can utilize to attract more LGBT travelers from these two markets.

“The studies’ findings reveal there is potential in Japan and Taiwan to reach a larger percentage of LGBT travelers from both markets,” said Chun. “Hawaii tourism partners can customize their marketing programs to make a vacation in the islands a more enticing option compared to other destinations in Asia that are currently drawing the bulk of LGBT travelers from Japan and Taiwan.

“Hawaii’s attributes are well-known to LGBT travelers from Japan, but the research indicates that special offers targeting this particular segment would be well-received and help allay concerns about Hawaii being a good value.

“Taiwan appears to be a budding LGBT travel market for Hawaii that can be developed through increased awareness about the offerings of the islands beyond our beautiful beaches. For example, Taiwan’s LGBT travelers enjoy excellence in cuisine and touring historic sites and landmarks, but they don’t yet associate these attributes with Hawaii.

“Furthermore, Taiwan’s survey respondents do not view Hawaii as an LGBT-friendly destination, which is not the case and a perception that can be changed by educating travelers about our longstanding legacy of diversity and acceptance of all people worldwide, regardless of their ethnicity, religious beliefs or sexual orientation.”

Noteworthy findings from the LGBT travel studies about Japan and Taiwan include the following:

Japan

  • Survey respondents averaged 3.3 leisure trips outside Japan’s mainland in the past three years, with gay and bisexual men taking more trips (3.6 trips) than lesbian and bisexual women (2.9 trips).
  • Among destinations visited in the past three years, Hawaii ranks sixth among survey respondents at 14 percent. The top five destinations were Taiwan (47%), Thailand (33%), Okinawa (32%), Korea (22%) and Hong Kong (19%).
  • Of the survey respondents, 43 percent have visited Hawaii since adulthood and, within that group, 33 percent have visited Hawaii in the past three years. Oahu has been visited by 77 percent of respondents followed by the island of Hawaii at 32 percent and Maui at 10 percent.
  • The top three reasons for Japan LGBT travelers not visiting Hawaii since adulthood or within the past three years were “financial reasons/travel costs” (31%), “better value at another destination” (27%), and “not enough time to travel” (25%). LGBT-related reasons were not a factor.

Taiwan

  • Within Asia, Taiwan is considered to be very progressive in regard to LGBT rights. On May 24, 2017, Taiwan’s Constitutional Court ruled that the definition of marriage as being only between a man and a woman as unconstitutional. The ruling paves the way for Taiwan to become the first country in Asia to legalize same-sex marriage.
  • Survey respondents took an average of three vacations outside Taiwan within the past three years. The most popular destination for both LGBT men and women is Japan at 71 percent, with the visitation rate being similar to the general population. Bali, the Maldives and Guam are all more favorable as travel destinations than Hawaii.
  • Only 8 percent of survey respondents have visited Hawaii. The most common reasons for not visiting Hawaii were “financial reasons/travel costs” (42%), “not enough time to travel” (36%), and “not familiar with what there is to see and do in Hawaii” (35%).

About the Hawaii Tourism Authority

The Hawaii Tourism Authority is responsible for strategically managing the State of Hawaii’s marketing initiatives to support tourism. HTA’s goal is to optimize tourism’s benefits for Hawaii, while being attentive to the interests of travelers, the community and visitor industry. Established in 1998 to support Hawaii’s leading industry and largest employer, HTA continually strives to help ensure the sustainability of tourism’s success.