New Tax Reform Law Concerning Rental Property Real Estate Taxes

Forum|Forum|7 years ago
February 8, 2019
1 reply
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Hi, hoping someone can help clarify the new tax law concerning real estate taxes. My boyfriend and I(not married)have real estate together that I usually claim entirely on my taxes along with our primary home. This year, because of the new law, I'm wondering if I should break them up and have him claim some. Here are the numbers:

Rental Property A-$1400

Rental Property B-$5100

Rental Property C-$1500

Primary Home-$5100

My state and local taxes are just under $7000. To me, it seems I need to have him claim some of the real estate property taxes in order to not reach the "cap". Can someone confirm I'm correct? I'm trying to be proactive and do them right the first time! Thanks everyone!

P

PaulaM

Employee

The new law capping state, local, property, and sales taxes (SALT) to $10,000, is in regards to your personal property taxes. Rental property taxes are not capped and you deduct these taxes on the schedule E along with the rest of your rental property expenses.

Tax Reform and SALT taxes

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N

NCPERSON1

PaulaM - on the primary home, does it matter who PAID the property taxes? so if she PAID them all, only she can take the deduction? if they had each PAID half then sure, each take their fair share? So my point is to split the deduction and get around SALT, that would have been determined by who wrote the check out or how many checks (one from each person) were used when the taxes were paid. If from a mortgage escrow account, maybe it doesn't matter (assuming both names are on the mortgage) and / or community property state?.

P

PaulaM

Employee

@NCPERSON1 Yes, you are correct. Personal property taxes are deducted by the person paying them. Divide if both paid their share by whatever split was paid by each.

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