The payment of property tax by a tenant is considered part of his rent payment to the landlord, and would be considered for income tax purposes as rent income to the landlord. I don't see any way that the payment of taxes by a tenant on behalf of a property owner is not income to the property owner. However the payment of the tax is a deduction to the landlord, so there is a net effect. That is, if the tax is $20,000. The tenant pays the landlord $20,000 (or directly pays the tax), which is a rent deduction to the tenant and rent income to the landlord. The landlord pays the taxes (or has them paid on his behalf) which gives rise to a deduction of $20,000 to the landlord. The net effect is that the rent income which covers the taxes is offset by the deduction for the payment of the tax and there is no net taxable income to the owner for that portion of the rent.
Mar 12, 2014