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 Dear Tax Talk:
My six siblings and I purchased a home for our mother, who lives in the house year-round. We pay the real estate taxes on the property but do not live in the house. Does this qualify as a second home, and can we claim the real estate taxes? If we can claim the taxes, do I report them separately from the real estate taxes from my first home, or lump them together?
-- Glen
 Dear
Glen,
A lot of folks confuse the real estate tax deduction with the rules relating to deducting home mortgage interest. This confusion leads people to omit deductible taxes from their return.
Under the mortgage interest rules, you can only deduct mortgage interest on your primary home and a second personal residence. Real estate taxes are fully deductible whether paid on your home, a second or third or a hundred homes.
Real estate taxes are also deductible on vacant land, whereas vacant land cannot be considered a second home for the mortgage interest rules. So long as your name appears on the property, you can claim the share of taxes that you paid during the year whatever its purpose.
Real estate tax is imposed by state and local governments. You can deduct these taxes if it is based on the assessed value of the real property and the taxing authority charges a uniform rate on all property in its jurisdiction. The tax must be for the welfare of the general public and not be a payment for a special privilege granted or service rendered to you. For example, water, trash or similar services are not considered real estate taxes.
You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property.
You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge.
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