Property taxes are due in October each year, but are not delinquent until February of the following year. What is paid in October is the taxes for that complete calendar year.

Scenario -

The LE is provided September 2017. Since the taxes for the current year will be due within 60 days, should F. Prepaids > Property Taxes be disclosed as 12 months with the whole amount due or should it be disclosed as 4 months with the prorated amount due since this is the amount the buyer will be paying toward the current year's taxes? Taxes here are almost always prorated for the seller's portion for the time they owned the property in the current year and the buyer's portion from the purchase date.

How does that translate to the CD? or Does that depend on how the title attorney executes collecting and paying the taxes?

For example in the above scenario, assume that the seller will pay the whole year's taxes through the title company at consummation of the purchase and will receive "Adjustments for Items Paid by Seller in Advance" for the buyer's prorated portion of the taxes. Does this mean that nothing is reported in F. Prepaids > Property Taxes?

Please clarify.
The tax bill received by the seller in October 2017 is for the calendar year of 2017, correct?
Are they due as a lump sum payment only?
What is the closing date?

If you are requiring the taxes to be paid at closing, then that is a borrower cost and if they are paying for the entire year, then that would show 12 months in the borrower's column under pre-paids. Any adjustment would be in the summaries section with a credit coming from the seller to the borrower for the seller's portion.

Truffle Royale - Yes, it is for the calendar year of 2017, due as a lump sum payment only. Closing date ended up being 10.17.17.

Randy - We are requiring that the taxes be paid because they are due too early to include in the escrow for the upcoming year. Additionally, the property taxes due is almost always prorated between the buyer and seller in this area. The title companies are disclosing under "Adjustments for Items Paid by Seller in Advance" for an adjustment for a proration of the remaining days in the year that the property is owned by the buyer, with the cost of the 2017 taxes being attributed to the seller as a cost they owe. Nothing is being reported on the Final CD for the buyer/borrower in Prepaids. The Seller is paying the taxes for the whole year and are given a credit/adjustment from the buyer/borrower.

This seems backwards...

Read this.
I think all your answers are there, including showing the taxes in the Seller's column in F with a corresponding credit for the borrower's portion.
I've seen taxes handled a couple different ways on CDs. Randy will correct me, I'm sure , but I don't think TRID prescribes one specific way to do it.

Thank you for the thread. I read through it but I am still not completely clear.

Keeping in mind that the bill for taxes is for the current year with a assessment cycle of 1.1 - 12.31 , the bills are sent out generally on October 1st of that year (or within a few days). The bill must be paid anytime between when the bill is received through February 28th of the next year. March 1st the tax bill is considered delinquent and now is assessed penalties.

When a loan will be closing within 60 days of October 1st, it appears from looking at a few Seller CDs that it is customary for the property taxes to be paid on behalf of the Seller in conjunction with the purchase transaction. The Title Company disburses the funds from the Seller's proceeds and pays the County Tax department directly. I looked through a few sales contracts and I couldn't find where this was addressed specifically. With this in mind, is the following correct for transactions within 60 days of October property tax billing?

LE -
> Do not report anything in F. Prepaids for property taxes

CD -
> Disclose 12 months and the whole amount of the property tax due under F. Prepaids (should this really be under H. Other since the seller is paying it?) and mark as Seller paid at closing
> Disclose an Adjustment for Items Paid by Seller in Advance with dates of the closing to the end of the year with the prorated amount of taxes that is the Buyer's portion.

The scenario above would also work if in November and December the Seller still hadn't paid the taxes.

Any other time during the year when the transaction is not closing within 60 days of the property tax bill, we only have to show the proration adjustment on the CD either to the Seller or Buyer as is appropriate if the taxes are not yet due or if they have already been paid.

Otherwise, the only time we may have to use F. Prepaids for property tax would be on a refinance that was not being escrowed where the borrower is delinquent on their taxes and we are requiring it to be paid.

Correct?

The tax bill is for the current year.
If the property is sold anytime after the bill is issued, imho, it should be paid at closing.
I can think of two ways of showing this on the CD:
1) put it in F with the appropriate amounts in each of the Paid by Borrower and Paid by Seller columns
2) (what I see most often) put the taxes in F in the Paid by Seller column and on page 3 give a credit from the borrower to the seller for the days the borrower will occupy.

Beyond that, what do you mean by "when the transaction is not closing within 60 days of the property tax bill,"?
What is the actual date you are using for "the property tax bill"? Is it Oct 1 or March 1?
I think you could get into a bind using Oct 1 for purchases and March 1 for refinances. I'd pick one and be consistent.

I guess that statement is not accurate. What I had in mind was, for example, I purchased my home in March 2017. My LE did not have any prepaid property taxes because the tax bill would not be issued until October 2017. We were not yet aware if the Seller had paid the 2016 taxes but the assumption is that they would have by that time. During the underwriting process, it is confirmed that the property taxes on the property were paid in 2016. So all that was needed was an adjustment from the Seller to give me credit toward the time the Seller owed the property in 2017. My escrow account was calculated with the upcoming October 2017 property taxes and so everything is accounted for. The property tax bill is due and payable when received but not delinquent until March 1st of the following year. Escrow here is set up to disburse payment for property taxes in October each year, we don't wait until the last minute.

We escrow for all consumer home loans so March 1 is never an issue on an in-house refinance, the tax bill is current.

A refinance from another institution if the applicant does not have their taxes current, we would require they be paid and disclose accordingly and then escrow for the next payment. Much like what would be done for homeowners insurance if they were previously paying month to month, etc.; we would require they be caught up through the policy period and the following annual payment would be escrowed.

If the taxes are to be prepaid by the seller at closing, you can show the full 12 months prepaid taxes in section F in the seller column. There will be no prepaid taxes due from the borrower, and there will be an adjustment credit to the seller (charge to the buyer) for the period of time from 10/17/18 to 12/31/18.

Another way of doing it is to have the borrower/buyer responsible for payment to the county and collect 12 months prepaid in Section F (borrower column) and include an adjustment credit to the buyer (charge to the seller) for the 9 months and 17 days that the seller owned the property.

Either way, the county gets paid from the closing funds.