Penalty for late payment of property taxes

[Luis Mopeo]

Penalty for late payment of property tax is a percentage of the amount due.

Deductible on Schedule A?

[Brian EA]

Just like late payment on your mortgage. The penalty is added on to the interest
brian

[Beth]

Late Prop Taxes

Added to the property taxes, or added to the interest?

[Jesse]

I thought that interest on late payment of property tax should be deductible, but found a cite saying it wasn't. In Or after three years the county sells your property.

This reply was from another thread, but I have taken the the deduction as "mortgage interest" because if not paid the home can be taken away to be sold by auction? But I've been wrong before!

[Jiggers]

Penalties

Penalty for late payment of property tax is a percentage of the amount due.

Deductible on Schedule A?

Not deductible anywhere.

[Jesse]

Sorry - you're correct penalties/fines are not deductible, I perceived it as interest.

In our county there is not a "penalty" it is interest charged monthly and after so many years if it is not paid the county can and will "foreclose" and auction off your property.

[Luis Mopeo]

Sorry - you're correct penalties/fines are not deductible, I perceived it as interest.

In our county there is not a "penalty" it is interest charged monthly and after so many years if it is not paid the county can and will "foreclose" and auction off your property.

Not true.

It's true that you cannot deduct fines or penalties that are the result of breaking the law, IRC section 162(f), but it's not a crime to be late on your property tax payment.

Still in play.

[Bees Knees]

Not true.

It's true that you cannot deduct fines or penalties that are the result of breaking the law, IRC section 162(f), but it's not a crime to be late on your property tax payment.

Still in play.

If it is not a crime to be late on your property taxes, then the government cannot take your property for failure to pay your property taxes.

What would you call it, if it is not a crime?

A foreclosure?

Nope: the gov isn't selling you the property.

Theft?

If it isn't a crime to fail to pay your taxes, then it most certainly would be theft for them to take your property. I agree with Jesse and Jiggers. Failure to pay property taxes is a crime, punishable by penalty, interest, and possible the taking of your property.

Penalty not deductible under Section 162(f).

[Luis Mopeo]

If it is not a crime to be late on your property taxes, then the government cannot take your property for failure to pay your property taxes.

What would you call it, if it is not a crime?

A foreclosure?

Nope: the gov isn't selling you the property.

Theft?

If it isn't a crime to fail to pay your taxes, then it most certainly would be theft for them to take your property. I agree with Jesse and Jiggers. Failure to pay property taxes is a crime, punishable by penalty, interest, and possible the taking of your property.

Penalty not deductible under Section 162(f).

It's no different if you failed to make your mortgage payments. Substitute "mortgage interest" for "taxes" in the above statement. All of the factors you cite would apply also to mortgage interest. Why, then, can you deduct charges for paying your mortgage interest late?

Are nonpayment of taxes a "crime?" If the government takes your house for nonpayment of interest or taxes, it does so in civil court. The proceedings do not take place in criminal court.

I'm not saying yes or no. But if 162(f) doesn't apply to late interest payments, how can it apply to property tax payments?

Still in play.

[WhiteOleander]

The penalty is interest on the unpaid tax.

Personal interest. Not deductible.

JMHO

[JG EA]

Also

Think of the interest on the taxes as "not secured by the home". That will help you see it is personal interest.

[Bees Knees]

It's no different if you failed to make your mortgage payments. Substitute "mortgage interest" for "taxes" in the above statement.

Really? You equate a bank holding a mortgage on property with a government demanding a tax on your property?

Big difference.

Are nonpayment of taxes a "crime?" If the government takes your house for nonpayment of interest or taxes, it does so in civil court. The proceedings do not take place in criminal court.

The code does not say it has to be a felony, punishable by time spent in prison.

Section 162(f) says “no deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.”

Late on your property taxes? Who do you pay the penalty to? The government. Why? Because you failed to obey the law that says you have to pay property taxes.

What’s so difficult to understand about that?

But if 162(f) doesn't apply to late interest payments, how can it apply to property tax payments?

Section 162(f) does not apply to late interest payments because you don’t pay late interest penalties to a government. You pay it to the bank.

[Jesse]

Think of the interest on the taxes as "not secured by the home". That will help you see it is personal interest.

But it is secured by the home, if you do not pay they can and will take your property and sell at a Sherriffs auction.

In our county it is stated on the receipt as interest at the rate of 1 1/2% per month. I don't know if this makes it deductible or not but the way I see it is it is not a "crime" not to pay, but you are charged interest if you do not pay on time and it is secured by your home.

[taxea]

Sounds like theft by fraud to me taxea

[jainen]

Jeepers!

>>you are charged interest if you do not pay on time and it is secured by your home<<

Jeepers! I thought this thread had a boring subject so I didn't read it until I saw that it had a dozen posts. I've missed out on two days of fun! It's hard to make up for that in one big step, but I'll try.

How about this? IRC Section 6321 declares that a lien arises AUTOMATICALLY on all property you own as soon as the tax is assessed (i.e., when you file). Therefore any late payment penalty and interest that you pay to the IRS is deductible as home mortgage interest!