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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16580
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

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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?

Megan C :

Thank you for your question, and thanks for using

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 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
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