Do I have to pay income tax on any of this?
The only part of your redemption payout subject to income tax is the accrued penalty—the percent you bid at the tax sale or the 12% per year for subtaxes (see #3 above). This will be treated as interest income. At the beginning of the following year, you will receive a 1099-INT form from the County Clerk’s Office to use in your income tax return preparation.

Show All Answers

1. What is a “tax buyer”? How do I become one? When is the tax sale? What is the procedure at the tax sale? How do I pay? How do I get my certificate of sale?
2. What is the next step after I buy the taxes on a property?
3. What should I do if the subsequent years’ taxes are not paid either?
4. How do I extend the last date to redeem?
5. The end of the redemption period is getting close. What is the procedure for obtaining the deed to the property?
6. Can I get reimbursed for expenses?
7. How can I verify whether charges have posted or what the current redemption balance is?
8. How do I know if the taxes have been redeemed?
9. How do I get paid on a property that has been redeemed?
10. Do I have to pay income tax on any of this?