The Department of Revenue has just advised taxpayers, in Directive 10-7, that a taxpayer occupying his or her principal residence under the terms of a life estate (which requires the life tenant to pay real estate taxes) and is otherwise eligible may claim the Senior Circuit Breaker Tax Credit.
In the most common life estate situation, a remainder interest in the home is transferred to a third party, often a child, with the grantor(s) retaining a life interest either individually or jointly. The life tenant generally retains the exclusive right to use the property during his or her lifetime, but that right expires automatically upon the death of the last life tenant(s).
Generally, the life tenant is responsible for real estate taxes, insurance, and ordinary maintenance costs and upkeep of the property.
Thus, DOR wants to make it abundantly clear that senior taxpayers who are life tenants are most certainly eligible for the Senior Circuit Breaker Tax Credit.
DOR + Social Media — #CheckUsOut posted on Jul 28
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