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taxache
New Member

Inherited home property tax. I reimbursed the estate 2016's property tax before it was titled to me, tax deductible?

Since the title of the property is invested on the beneficiary the day the testator dies, is it safe to assume that the property tax reimbursed to the estate can be deducted?

Thanks

1 Best answer

Accepted Solutions
Coleen3
Intuit Alumni

Inherited home property tax. I reimbursed the estate 2016's property tax before it was titled to me, tax deductible?

Only the owner can deduct the taxes and interest.

If you are the "constructive or beneficial owner", you can deduct the taxes and interest even if you aren't the legal owner.  "Constructive ownership" is a complicated concept but in general it means that you treat the home as if you owned; that you accept all the responsibility of ownership and derive the benefits of ownership.

For example, it might be the case that you are the only heir, and will inherit the house as soon as the estate is probated, at which point you will sell it and keep the profits.  In the meantime, you have been paying the tax, mortgage, and performing all needed repairs and maintenance to keep the property in good shape.  You might be a constructive owner in that case.

On the other hand, if the home will be inherited by someone else, and you are paying the bills but not doing any other work, and the heir is starting to move their stuff in, then you probably aren't a constructive or beneficial owner.  In that case, the estate should be making the payments and deducting the expenses on the estate tax return, or the estate should reimburse you before the remaining funds are disbursed

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2 Replies
Coleen3
Intuit Alumni

Inherited home property tax. I reimbursed the estate 2016's property tax before it was titled to me, tax deductible?

Only the owner can deduct the taxes and interest.

If you are the "constructive or beneficial owner", you can deduct the taxes and interest even if you aren't the legal owner.  "Constructive ownership" is a complicated concept but in general it means that you treat the home as if you owned; that you accept all the responsibility of ownership and derive the benefits of ownership.

For example, it might be the case that you are the only heir, and will inherit the house as soon as the estate is probated, at which point you will sell it and keep the profits.  In the meantime, you have been paying the tax, mortgage, and performing all needed repairs and maintenance to keep the property in good shape.  You might be a constructive owner in that case.

On the other hand, if the home will be inherited by someone else, and you are paying the bills but not doing any other work, and the heir is starting to move their stuff in, then you probably aren't a constructive or beneficial owner.  In that case, the estate should be making the payments and deducting the expenses on the estate tax return, or the estate should reimburse you before the remaining funds are disbursed

taxache
New Member

Inherited home property tax. I reimbursed the estate 2016's property tax before it was titled to me, tax deductible?

Great answer Thank you

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