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I'm planning on paying the property taxes of a home my mother-in-law owns. She owns the house, but I live there. As part of the bargain, I agreed to pay the property taxes.

If I write the check directly to the State/County, can I write it off on my year end taxes?

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    Are property taxes even paid to the IRS? Where I'm from, we pay property taxes to the city or municipality. – Chris W. Rea Sep 13 '10 at 18:02
  • @Chris - In the US you can usually deduct taxes paid to a local or state Government from your Federal taxes. – JohnFx Sep 13 '10 at 18:20
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    @JohnFx Acknowledged. What I'm wondering about is the bit "if I write the [property taxes] check directly to the IRS" ... I would expect the IRS does not collect property taxes. – Chris W. Rea Sep 13 '10 at 18:54
  • Oh, good point. I didn't notice that last bit. That is a little strange. – JohnFx Sep 13 '10 at 20:51
  • I changed the question, your correct, I would not pay it to the IRS. – Dan Williams Sep 14 '10 at 18:59
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According to page 107 of the instructions for schedule A for form 1040 :

Include taxes (state, local, or foreign) paid on real estate you own that was not used for business. ...

If you want to make a business out of her property and be her agent in the management, you might be able to work with an accountant on this, but it won't be a valid personal deduction.

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    bummer - Page 104 (A-2) "Taxes You Cannot Deduct... tax you paid for someone else" – Dan Williams Sep 14 '10 at 19:04
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To make matters worse, if you pay the property tax your mother in law can't take the deduction either. You may be better off paying rent and having her handle the property correctly, as a rental.

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    Here's a recent consumerist article that says your mother in law could take the deduction and consider the funds from OP as a gift. – Alex B Sep 22 '11 at 18:31
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    @AlexB - nice find. However, a court ruling does not change the tax code, it only applied to this particular tax payer. In this case why not let the OP gift the money and avoid the time and trouble of going to court? The ruling the article led to was to dispute a total of $35K of disallowed deductions. – JoeTaxpayer Sep 22 '11 at 22:54
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    I agree, gifting explicitly is a better tax solution. – Alex B Sep 23 '11 at 5:17
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You cannot deduct. Even if you could, unless you also hold the mortgage, it's unlikely that you would have sufficient deductions to exceed the standard deduction for a married couple.

protected by Chris W. Rea Aug 12 '16 at 2:05

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