PostClosing: After the sale is finalized, the escrow account is used to pay ongoing expenses like property taxes and homeowners insurance. Your escrow reserve payment depends on when and where you close.The tax sale is the process where the tax lien certificates are sold at public auction to the highest bidder. Each County issues bidding rules for its sale. Whenever a real estate settlement is close to a property tax due date, the potential for a post closing property tax issue increases. The optional method allows you to deduct the mortgage interest and state and local real property taxes reported on Form 1098, Mortgage Interest Statement. This indicates that your mortgage lender has requested payment information from the County in order to make the tax payment from your escrow account. The seller can deduct the property taxes up to the date before the sale. The buyer can deduct property taxes starting on the date of sale. This does not relieve the transferor of the responsibility to file a Maryland income tax return reporting the sale of the property and any related gain or loss.
