Illinois property tax....how to treat on schedule E question?

[Rich Mohn]

Hello everyone, my name is Rich Mohn and I am a resident of Illinois. I am a frequent "lurker" on BiggerPockets! I do appreciate all of the tips that you can pick up on here, it really is a very useful site.

My situation is that I purchased a mixed use building, here in Illinois in April of 2012 that has 3 apartments upstairs and 2 offices down. It is the only rental property that I have. For now, I will do my own taxes and I have a good grasp on all of the things that I need to keep track of, however, I am still mixed up on the property tax issue.

Since Illinois property taxes are paid in arrears, at closing the seller credited me $1404 for all of the 2011 taxes and $364 for the 1st 3 months of 2012. I paid the 2011's this past summer.

Can I deduct the $1404 this year or do I have to add it back to the building cost and then add the $364 to the initial building cost next year?

I have read the information on the IRS site and called them and they basically read word for word, the same thing back to me.

Thank you