Real Estate Taxes Paid for Parent

[Yardley CPA]

Client pays real estate taxes for elderly parent.  The parent's home is in their name, not my clients.  Can my client deduct the real estate taxes she pays on the parent's home on her Schedule A?

[jklcpa]

No deduction for your client because she is not the legal owner.

[Yardley CPA]

Thank you.

 

[Catherine]

Can parent treat the money as a gift and then deduct the taxes themselves?

[Yardley CPA]

Catherine...I read up on that and will suggest it.  Thank you for posting.

[Pacun]

A completed gift has an important condition, which is that you will not receive anything in return. So technically a child who pays his/her parents' mortgage will get more affection in return. I would not go that route and let RE interest alone.

[Pacun]

One more question... If you take a position that it was a gift and therefore they will deduct their RE interest on sch A, will you be required as a perparer to let the IRS that you are taking that position?

 

[Richcpaman]

1 hour ago, Catherine said:

Can parent treat the money as a gift and then deduct the taxes themselves?

Yes.

It doesn't matter what they did with the "gift" cash.  The RE Taxes were paid.  They meet all the other requirements.

Client wants to deduct them, because parents probably get very little benefit from the deduction, but client might.

But daughter loses the test.

Rich

[jklcpa]

I agree with Rich that the parents are able to deduct the r.e. taxes that were paid by the daughter.   T.C. Memo. 2010-286 case covered this where it was exactly the reverse, where medical and r.e. taxes of a daughter were paid by by the parents directly to the the payees.