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Level 2

Second Property (non-rental)

Good morning, My family and I are considering purchasing a second home for our enjoyment, not for rental income.  As such, are we able t deduct property taxes on both locations (different states) up to the maximum of $10,000 annually per property?  The second home has no mortgage and is a cash purchase.  Thanks in advance!

2 Replies
Level 20

Second Property (non-rental)

The property taxes paid for the second home are deductible on Schedule A.  However, the SALT limitation of $10,000 ($5,000 filing Separately) is the total of all property taxes paid plus state/local taxes paid or sales taxes paid.  The $10,000 limit is not per property.

 

IRS Schedule A instructions - https://www.irs.gov/pub/irs-pdf/i1040sca.pdf

 

Limitation on the deduction for state and local taxes. You can’t deduct more than $10,000 ($5,000 if married filing separate) of your total state and local taxes, including income taxes (or general sales taxes, if elected instead of income taxes), real estate taxes, and personal property taxes.

 

 

Level 2

Second Property (non-rental)

Thank you for the reply.  Guess we will have to refine our tax strategy going forward!  Have a great weekend!