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I itemize deductions on Form 1040, Schedule A when I file my taxes. This year, I purchased a vacant land parcel through a tax default auction for non-payment of prior year property taxes in California. The auction price exceeded the minimum bid, which is established to pay the property taxes. Since I was the winning bidder, can I deduct the minimum bid price since this amount went to the county for prior property taxes on my federal taxes?


Expert Barbara Blacklidge's Answer:

You cannot deduct the delinquent real estate if the taxes are for any real property tax year before the one in which the property is sold (auctioned). http://www.irs.gov/publications/p17/ch22.html#en_US_2013_publink1000173171 Please let me know if you require further information or clarification. Thank you and best regards, Barbara

Barbara Blacklidge, EA


17 yrs experience

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21 Ans.