J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

16.4 Deducting Real Estate Taxes

Your payments of state, local, or foreign real estate taxes on your non-business property are deductible on Schedule A (Form 1040). The tax must be based on the assessed value of the property and the assessment must be based on a uniform rate imposed for public purposes. See 16.5 for deductible and nondeductible assessments for local benefits.

The monthly mortgage payment to a bank or other mortgage holder generally includes amounts allocated to real estate taxes, which are paid to the taxing authority on their due date. Mortgage payments allocated to real estate taxes are deductible in the year you make the payments only if the mortgage holder actually pays the taxes to the tax authority by the end of that year. Typically, banks will furnish you with a year-end statement of disbursements to taxing authorities, indicating dates of payment.

See 16.5–16.7 for further details on real estate taxes.

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Filing Tip

Cooperative Apartments

Tenant-stockholders of a cooperative housing corporation may deduct their share of the real estate taxes paid by the corporation. However, no deduction is allowed if the corporation does not own the land and building but merely leases them and pays taxes under the lease agreement (15.9).

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Who may deduct real property taxes.

A person who pays a property tax must have an ownership ...