Back taxes paid

[rburtner]

I bought the joining land and house beside me.
paid cash and a personal loan
had to pay back taxes at closing
can I claim the back taxes and or the interest on my personal loan

[DawnC0 · Accepted solution]

Homeowners who itemize their tax returns can deduct property taxes they pay on their main residence and any other real estate they own, in the year the taxes are paid, but this does not include delinquent taxes.  If you agree to pay delinquent taxes when you buy your home, you cannot deduct them. You treat them as part of the cost of your home.

See IRS Pub 530 

Personal loan interest is not deductible unless the loan is secured by real property. 

A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:

• Makes your ownership in a qualified property security for payment of the debt,

• Provides, in case of default, that your qualified property could satisfy the debt, and

• Is recorded or is otherwise perfected under any state or local law that applies.

In other words, your mortgage is a secured debt if you put your qualified property up as collateral to protect the interests of the lender. If you cannot pay the debt, your qualified property can then serve as payment to the lender to satisfy (pay) the debt. 

Home Mortgage Interest

[Edited 03/22/17 13:04]