Can I deduct property taxes (Texas) on a house I co-own with siblings (mother's estate)? I paid the property taxes on it in 2021 for two past years.

[graham-clan]

It is not a rental, although one of my family members lives in it. I pay taxes, insurance and general maintenance.

[xmasbaby0 · Accepted solution]

If your name is on the deed or the mortgage and you are legally obligated to pay the property taxes then you can add the property tax you paid in 2021 to your itemized deductions.    You are subject to the $10,000 cap on state and local taxes paid, and your itemized deductions must exceed your standard deduction in order to have any effect.

STANDARD DEDUCTION

Many taxpayers are surprised because their itemized deductions are not having the same effect as they did on past tax returns.  The new higher standard deduction and the elimination of certain deductions, as well as the cap on state and local taxes have had a major impact since the new tax laws went into effect beginning with 2018 returns.

Your itemized deductions have to be more than your standard deduction before you will see a change in your tax owed or tax refund.  The deductions you enter do not necessarily count “dollar for dollar;” many of them are subject to meeting  tough thresholds—medical expenses, for example, must meet a threshold that is pretty hard to reach. (Only the amount that is MORE than 7.5% of your AGI counts)   The software program uses all the IRS rules that apply to the expenses you enter, and it tells you if you have enough to use your itemized deductions or if using the standard deduction is more advantageous for you.  Under the new tax laws, some deductions have been capped—there is a $10,000 limit to the itemized deductions for state, local, property and sales taxes.

Your standard deduction lowers your taxable income.  It is not a refund.  You will see your standard or itemized deduction amount on line 12a of your 2021 Form 1040.

2021 STANDARD DEDUCTION AMOUNTS

SINGLE $12,550  (65 or older + $1700)

MARRIED FILING SEPARATELY $12,550  (65 or older + $1350)

MARRIED FILING JOINTLY $25,100  (65 or older + $1350 per spouse)

HEAD OF HOUSEHOLD  $18,800  (65 or older +$1700)

Legally Blind + $1350

[xmasbaby0]

Or----is the property owned by the estate?   Are you in probate---and paying the taxes etc yourself until the estate is settled?   That is trickier---so please clarify.

[graham-clan]

It bypassed probate because we had a Ladybird Deed Transfer in place so I misspoke about the estate.  The deed is in the name of my siblings and me.

I'm paying the taxes because my siblings are unable.

[Carl]

Generally, there's only two questions you have to answer as true, in order to claim/deduct property taxes.

- You must be legally obligated to pay them.

- You must have actually paid them.

For the mortgage interest deduction, the same two rules apply.

There are things that can change that, such as "vested interest". But from the sounds of it, that doesn't appear to apply to your situation.

[Anonymous_]

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@graham-clan wrote:

The deed is in the name of my siblings and me.

I'm paying the taxes because my siblings are unable.

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So, yes, in this instance you can deduct the property taxes if you paid them.

[Mike9241]

yes you can deduct them. however, you must be able to itemize and your tax deduction on Schedule A is limited to $10K for all taxes