Final answer:
The statement regarding the deductibility of state, local, and foreign real property taxes by the one who pays them is true. Property taxes support vital local services, and deductibility can reduce the taxpayer’s overall liability.
Step-by-step explanation:
- State, local, and foreign taxes on real property are indeed generally deductible by the person who pays the tax. This statement is true. Deducting property tax applies to individuals who itemize their tax deductions and can substantially lower their taxable income.
- On the local level, property taxes are primarily levied on real estate, which includes land, buildings, or other structures, and are based on assessed property value.
- Income taxes, on the other hand, are imposed on an individual's or corporation's net income by federal, most state, and some local governments, where the rates can vary widely. Property taxes are essential as they fund local services such as emergency services and public schools.
- Bearing this in mind, it is beneficial for taxpayers to understand which taxes they can deduct to potentially reduce their overall tax liability.