If you pay your retired parents' property taxes, can you take it as a deduction on your federal income taxes?
Can this only be done if you pay more than 50% of your parents' living expenses for the year?
2006-12-22 04:08:26 · 3 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
I think you can only take the deduction if you can claim your parents as dependents, and that in turn is when you pay more than 50% of their expenses etc.
So, I think your parents will have to claim this as a deduction on their income tax return. Now, what I think you should do is "buy" the house from your parents. You don't have to pay them full price etc. But than it will either be your second home or rental property, however you want to treat this. If this is a second home, you simply deduct mortgage interest (if any) and real estate tax. If this is a rental property, you will have to show rental payments from your parents, but every expense including light bulbs, landscaping, plumber or whatever becomes deductible as business expense. Most rental properties show as losing money on tax returns. Anyway, here are the ideas, think about them and see what's appropriate for you.
2006-12-22 04:20:25 · answer #1 · answered by Alexander K 3 · 0⤊ 1⤋
Only if you are the one who is legally obligated to pay it. If your parents own the property then THEY are liable for payment, not you. Therefore you cannot take the deduction. It would not matter if your parents were your dependants or not.
2006-12-22 13:44:09 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
A deduction is allowed only if you pay it (true) and are legally liable for it (not true). Unfortunately they cannot deduct it either because you paid it.
2006-12-22 12:20:58 · answer #3 · answered by spicertax 5 · 0⤊ 0⤋