NWR: Tax Question

posted 3 years ago in The Lounge
Post # 3
Member
2893 posts
Sugar bee
  • Wedding: May 2014

Short answer; go to a CPA.

Long answer; This is going to very state to state.  On federal tax returns, you can claim property taxes as an expense on rental property or for a business owned that uses the property to operate.  Since you wouldn’t own these, you couldn’t claim the taxes.

Some states have credits for property taxes.  My state has a homestead tax credit for property taxes paid on your home.  It only applies to the home you live in.

In both of these case, you couldn’t claim it on your returns.  But I would really go see a tax proffessional as they will be the best resource.  Espeically with also having inheritance from this year, having someone who knows what they are doing is important.

Post # 5
Member
223 posts
Helper bee

Also, referenced from the IRS website (a much better source than my above reference). To sum it up, it appears neither one of you are eligible for the deduction, based on the two criteria below. Hope this helps!

http://www.irs.gov/publications/p17/ch22.html

Tests To Deduct Any Tax                 

The following two tests must be met for you to deduct any tax.

  • The tax must be imposed on you.

  • You must pay the tax during your tax year.

 The tax must be imposed on you.                   

In general, you can deduct only taxes imposed on you.            

Generally, you can deduct property taxes only if you are an owner of the property. If your spouse owns the property and pays the real estate taxes, the taxes are deductible on your spouse’s separate return or on your joint return.            
 
You must pay the tax during your tax year.                   
 If you are a cash basis taxpayer, you can deduct only those taxes you actually paid during your tax year. If you pay            your taxes by check, the day you mail or deliver the check is the date of payment, provided the check is honored by the financial            institution. If you use a pay-by-phone account (such as a credit card or electronic funds withdrawal), the date reported on            the statement of the financial institution showing when payment was made is the date of payment. If you contest a tax liability            and are a cash basis taxpayer, you can deduct the tax only in the year you actually pay it (or transfer money or other property            to provide for satisfaction of the contested liability). See Publication 538, Accounting Periods and Methods, for details.           

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