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Section 164 allows a deduction for certain taxes, including
State and local real property taxes, paid or accrued during the
taxable year. Sec. 164(a)(1). In general, taxes are deductible
only by the person upon whom they are imposed. See sec. 1.164-
1(a), Income Tax Regs.
Specifically, section 164(a) provides, in pertinent part:
SEC. 164(a). TAXES.
(a) General Rule.--Except as otherwise provided
in this section, the following taxes shall be
allowed as a deduction for the taxable year within
which paid or accrued:
(1) State and local, and foreign, real
property taxes.
During taxable year 1999, petitioners owned four distinct
properties. One such property was located in the Bahamas.
Petitioner testified that petitioners paid tax on this property
and claimed the tax paid as a portion of the deduction claimed
for real estate taxes on their Schedule A. However, petitioner
did not testify to the specific amount of the tax paid on the
Bahamas property. The only corroborating evidence in the record,
which petitioner alleges shows that a tax was paid on this
property, is a Reminder Notice from Lucaya Service Company
Limited. The Reminder Notice references lot, Lucayan Glen Unit 1
Block 17 Lot 37, and shows a total due from petitioner of $100.
However, the Reminder Notice describes the reason for payment due
as “service charge arrears”. Upon the basis of the record in
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Last modified: May 25, 2011