If it is considered a gift from your parents, you may still deduct your real estate taxes as long as you had a legal obligation to pay, such as being on the title to the property. These taxes are part of itemized deductions. You would only itemize if your total deductions exceed the standard deduction for your filing status. State and local taxes, including real estate taxes, are capped at $10,000 per year ($5,000 for married filing separately).
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