Deducting Property Taxes

Today TaxMama hears from Karen in the TaxQuips Forum who needs to settle an issue. “My husband and his brother jointly own a second home (both names are on the title).  But my husband paid the property taxes from an account titled only to himself. Can both my husband and his brother claim 50% of the property taxes paid?  In other words, is it the ownership of the home that determines who can deduct the taxes, or is it who actually paid the property taxes?”

Dear Karen,

Rita Lewis, EA explains that to deduct property taxes, the taxpayer(s) has to be BOTH

1.)    liable for the taxes (look at the name on the tax bill) and

2.)    2.) have paid them.

That said, two willing owners can certainly plan for the future by setting up a joint checking account for their jointly owned property, for example.

Just because only one name appears on the tax bill due to the format used for mailing, doesn’t mean both names are not on the tax records; your client may need to check with the municipality to make sure both owners actually are liable for the property taxes.

TaxMama adds one more thing to consider.

Although the account from which the property tax check was written was only in one owner’s name, the payment may have actually come from both owners…IF…

If your husband’s brother gave him money to help pay the property taxes, even if your husband paid the actual bill from his own account, you can justify splitting the deduction. Just have each brother keep track of the payments to each other.   I hope that claries it.

And remember, you can find answers to all kinds of questions about shared expenses, and other tax issues, free. Where? Where else? At www.TaxMama.com.

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2 thoughts on “Deducting Property Taxes

  1. Pingback: Ask TaxMama Issue 583 – A Dream

  2. adolfo gutierrez says:

    In my opinion both brothers can deduct their share of the property taxes paid, However they have to clarify on their tax return the reasons for the deduction. Many times a reasonable explanations satisfies the IRS and may prevent further inquiries even tax audits. You may have to substantiate by providing some proof to back up the reasoning.

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