Not sure what your state law is, but if you never took ownership of property, there probably was no deduciton for RE taxes paid on Schedule F to begin with. Normally buyer just receives interest on the redemption of taxes which would go on Sch. B of course. But since you deducted the payment of another persons property tax I suppose you would have to report on "Schedule F as refund of previously deducted expense. Hope that was your question.