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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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i live in MN, my grandma lives in WI. She is a year and a

Resolved Question:

i live in MN, my grandma lives in WI. She is a year and a half behind on her property taxes and I'm going to pay them. She is going to deed the property and house over to me and create a life estate so that she can continue to live there. Can I deduct the property taxes when I file my income taxes? Is there a difference between back taxes and the current year's taxes?
Submitted: 2 years ago.
Category: Finance
Expert:  Megan C replied 2 years ago.

Megan C :

Thank you for your question, and thanks for using JustAnswer.com

Megan C :

How are you today?

Megan C :

I hate to be the bearer of bad news, but with a life estate, typically the life tenant is the one who gets the deduction for mortgage interest etc

Megan C :

Mortgage interest, real estate taxes, etc

Megan C :

Also, real estate taxes are only deductible for your primary and secondary residences.

Megan C :

Actually, I did some more digging, and you can deduct real estate taxes on any property that you own

Megan C :

The mortgage interest is what is limited to your primary and secondary residences.

Customer: If we stay with her when visiting could it be considered a secondary residence? We've considered buying a cabin in that area for weekends, but wouldn't do that knowing that the property could someday be ours.
Megan C :

If you own the property, you can deduct the taxes. I did some digging. But, if you're paying the mortgage you would only be able to deduct the interest if its your primary or secondary residences

Customer: Thanks for digging! Can back taxes be deducted as well as payments on future taxes? How about interest on back taxes. I'm guessing "no" on the interest.
Megan C :

No, on the interest but taxes are deducted the year they are paid...so if you paid several years of taxes in one year then you would deduct the interest

Customer: Just to clarify, I could deduct the total taxes paid in a given year, but not interest, correct?
Megan C :

That is correct

Customer: Thanks much!
Megan C :

You're welcome

Megan C :

If you would, please take a moment to rate my response as "excellent" so that I may receive credit for assisting you today

Customer: I will.
Megan C :

Thanks much!

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 2 years ago.
Thanks, Bryan for your positive rating. Please come back and visit me for any of your tax, finance, and social security needs. It was a pleasure working with you today