Real Estate Taxes

[barzillai]

I have several elderly clients who have gifted their homes to their children for one reason or another; however they continue to live in them and pay all expenses including taxes. Am I correct in understanding that these clients cannot deduct these taxes? Can the children deduct them, even thought they didn't pay them and don't live in the homes? And is there any gifting arrangement, such as a life estate, where the taxpayer can deduct these taxes?

I am sorry for so many questions, but I am running into this situation a lot lately.

Thanks for your help.

[erchess]

I don't have a cite but

I think that if you live in a home as your first or second home you can deduct the taxes you pay on it whether or not you own the home.

[Gretel]

I am not sure but is this not an implied life estate? Then you can deduct the taxes.

If you just life in someones homes and pay all the expenses I don't think you would be able to deduct taxes. The phrase "equitable owner" so far applies to mortgages only unless there will another court decision.

[ChEAr$]

Right

Agree with Gretel and not with my esteemed colleague erchess!

To be deductible taxes must be assessed to and paid by the owner.

For this year, then, the remedy would be for parents to reimburse children for the property
taxes they pay on their house.

[BP.]

you can deduct the taxes you pay on it whether or not you own the home.

Pub 17, p. 147, Tests to Deduct Any Tax:
"Generally, you can deduct property taxes only if you are an owner of the property."