Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

November 2020

November 2020 Q and A

Question and Answer

Question:
My son turns 19 in December. Can I still claim him as a dependent on my tax return?


Answer:
There are several tests that determine eligibility. Your son needs to be a full-time student for five months of the year or permanently and totally disabled. He will also need to live with you for more than half the year with certain exceptions allowed. Additionally, he will need to receive more than half his support from you and not file a joint return with someone else.


To qualify as a student, he will need to be enrolled full-time at a college or vocational school for five months of the year. The five months need not be consecutive. On-the-job training courses or schools offering courses only through the internet don’t qualify.


Question:
I own a second home in Mexico that I rent out when I’m not there. Am I allowed to deduct the property taxes I pay to the local Mexican government on my U.S. tax return?


Answer:
Yes, you can deduct them as a business expense when you complete Schedule E to report your rental activity. But you’ll need to allocate the amount between the number of days it’s rented versus used personally or used by friends or family who don’t pay you a fair rental price.


However, you can’t deduct these taxes on Schedule A if you itemize and don’t file Schedule E because foreign real estate taxes aren’t an itemizable deduction.


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