When I lived in a MR district, we put the MR tax on our tax return every year, as did our neighbors. At the time, my understanding was that if the tax was to pay for something that would benefit only the MR district residents (ie, a private pool, private roads, etc), then it was not tax deductible. Since this was not the case, we deducted it. As TG points out, it showed up on our 1098 in the “taxes paid” figure and was not a separate tax bill. I just took that 1098 number and plopped it into TurboTax.
All of our neighbors at the time did the same thing. I never heard of anyone getting audited, but then again the MR was not high and I think the difference it made in the taxes we paid was minimal. I didn’t spend any time worrying about it because I didn’t realize there was controversy about it’s deductibility beyond the private vs public as stated above.
I agree with TG that it would probably look suspicious if the number you claim for prop taxes paid did not match what the 1098 says, since I’m sure the IRS has software that tries to match those numbers up.
This whole issue is moot here at our current house, so I don’t even have to think it through any more.
Excellent thread. These are the types of post that make this such a wonderful place to visit.
