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A house divided over property taxes

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in Small Business Tax,Small Business Tax Deduction Strategies

Q.  To protect against a child’s spendthrift ways, my brother put his son’s home in our names (my wife and I). Can we deduct the property taxes?

A. No. Property taxes are deductible on a federal tax return only by the individual who pays the taxes and is a legal owner of the property. Even though you and your spouse are the owners, you’re not paying the taxes, so you can’t deduct them. This way, no one is getting any tax benefit from the property tax payments, so the family might consider other arrangements.

Tip: Currently, property taxes are deductible only by itemizers.

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