Delinquent Prop Taxes

[Snaggletooth]

A client bought a second home, and upon purchase had to pay $6003 in delinquent property taxes.

As he is required to pay them as a condition of purchase, are these deductible on Schedule A?

[veritas]

I don't

believe so. I don't have TTB at home but I'll bet it addresses this.

[Snaggletooth]

Answer is in TTB

I don't know how I missed it, but it is in TTB plain as day. 1040 version, p. 4-10, first column. Delinquent taxes must be added to basis.

[dyne]

Snaggletooth: Thank you, I learned something new!

[taxea]

Does this rule apply to prior year taxes that would be considered deliquent because they were paid late in the current year or maybe a whole year later?

[WhiteOleander]

Does this rule apply to prior year taxes that would be considered deliquent because they were paid late in the current year or maybe a whole year later?

No. You cannot deduct taxes paid for a time when you did not own the property. You can only deduct taxes paid that were levied while you were the owner. So, paying past year taxes that were levied when you owned the property (you just couldn't pay them) would be deductible the year they are paid.

Someone who purchased property for the amount of back taxes owed would not be able to deduct that figure as RE taxes paid. That would become their basis in the property.

[dyne]

According to TTB page 4-10 this only applies to property purchased. In such a case the property tax statements
would be in the sellers name and NOT the buyer or clients name. Therefore delinquent property tax paid by taxpayers who simply paid the tax late and did not purchase the property lately is deductible in the year paid. Agree?

[Burke]

Yes, that is correct. But not the interest and/or penalties.