Part 5/6:
To illustrate how property tax deductions work within trusts, imagine an individual has transferred a property into a revocable living trust. The trust holds the title to the property, yet the individual retains ownership for tax purposes. Therefore, the individual continues paying property taxes and can claim relevant deductions, as the RLT does not confer any different tax treatment.
However, in the case of an irrevocable trust, the trust fully owns the property, and any income derived from it is considered the trust's income. Consequently, property tax deductions can be taken against this income, effectively reducing the trust's net income.