(Bloomberg) -- Washington D.C.'s city government collected more than $50 million in prepayments of 2018 property taxes from about 7,500 taxpayers, said David Umansky, a spokesman for the city's Chief Financial Officer Jeffrey S. DeWitt.
The number of prepayments and their amount was “unusual,” said Umansky, who described the numbers as preliminary. But he added that district officials don't normally track the prepayments they receive in December.
The rush to prepay by the end of 2017 came as many Americans sought to avoid a new $10,000 limit on state and local tax deductions for federal income taxes that took effect Jan. 1. The cap was imposed by the GOP tax-overhaul legislation that President Donald Trump signed Dec. 22.
The bill's language gave local governments an opening to let taxpayers claim the full property-tax deduction for 2018 if they prepaid those taxes before the end of 2017. The Internal Revenue Service later said that prepaid property taxes would be deductible on 2017 returns only if the local taxing authority had already assessed the taxes -- a decision that would prevent or limit the benefit for many.
In Washington D.C., however, officials said their tax assessments would meet the IRS standard.
To contact the reporter on this story: Sahil Kapur in Washington at skapur39@bloomberg.net.
To contact the editor responsible for this story: John Voskuhl at jvoskuhl@bloomberg.net.
©2018 Bloomberg L.P.
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