Sufficiency of a personal receipt to declare tax deduction on property taxes for homestead

USA Discussion in 'General Tax Discussion' started by justinhaynes, Jun 15, 2018.

  1. justinhaynes

    justinhaynes

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    I'll anonymize the situation:

    - Before 2016, 123 Main Street was a property in one of the 4 largest cities, in a county in the State of Texas, USA, containing land and a single family dwelling, a house.
    - in 2016, the house was demolished, and in its place a 2 unit condo was placed, 123A Main Street and 123B Main Street. So the property was subdivided at that time for city planning and permitting purposes.
    - In 2018, the property was finally subdivided for tax purposes and two separate records exist. 1 for 123A and 1 for 123B.
    - In 2017, therefore, the properties 123A and 123B both existed physically and as real estate, but a tax record only existed for 123 Main Street with the county. 123A and 123B did not exist for tax purposes with the county.
    - In 2017, Person A bought 123A and Person B bought 123B.
    - In 2018, the county sent a tax bill for 123 Main Street to BOTH Person A (who did not escrow) ,AND to the loan servicing company holding in escrow funds for taxes for Person B.
    - In 2017, the loan servicing company servicing the loan for person B paid the FULL BILL for 123 Main Street, resulting in a doubled house payment due to the loan servicing company's error. (Escrow shortfall + projected property taxes for the next year being double).
    - Person A has not paid any taxes on 123A, because Person B told them not to. (Person A has owned many properties. Person B is a newlywed and a first time homeowner)

    The question is: Can Person A pay Person B for half the amount of the full bill, so that Person B can write Person A a receipt ,so that Person A can use that receipt as proof of payment for their taxes? What other proof would be necessary for the IRS? (Texas has no state income tax. Only Federal). Person B would then pay the loan servicing company for the shortfall for last year, and have the loan servicing company to correct their projection to match the value shown on the 123B tax record.
     
    justinhaynes, Jun 15, 2018
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  2. justinhaynes

    SSM0011

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    Sure. Just document it thoroughly.
     
    SSM0011, Jun 26, 2018
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  3. justinhaynes

    justinhaynes

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    We had to escalate the problem to such a level with the loan sub-service provider to resolve the escrow problem, that we had a high level of engagement from them. Person A wrote a check for their tax bill to the loan sub-servicer for person B's mortgage, and the sub-servicer wrote a receipt and cover letter to Person A. All sorted.

    Person A now has the proof they need for their taxes.
     
    justinhaynes, Jul 21, 2018
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