Generally, one has to meet two criteria to claim/deduct mortgage interest and property taxes.
1) Must be legally obligated to pay the debt.
2) Must actually pay the debt.
However, there is this thing called "vested interest", where if the taxpayer has such in the property, they can claim the deductions provided they actually paid them. In some cases, that "vested interest" can be difficult to prove if audited. For real estate, I don't see it as that big a problem if they claim and can prove the property they live in (which the daughter paid for) is their primary residence, and only residence. Proving residence isn't all that difficult either. I would think that having a roof over one's head would be "vested interest". But then, I'm not a tax attorney/lawyer/professional either.
