Taxes on Rental Properties & Cash Out Refi to Pay

[Matt N.]

Hi! For rental properties, are taxes paid (outside of property taxes) deductible? What about estimated income taxes sourced from rental income? Let's say I make $10,000 in one year from rental property. I then pay:

- $1k to local government for a hotel tax (transient occupancy tax in order to operate my rental)

- $4k to federal government estimated income tax

- $2k to state government estimated income tax

Does this mean I can a) deduct $7k from rental income as other expense in schedule E? Furthermore, if I used funds from a cashout refi to pay these taxes, can I deduct $7k portion of interest as interest expense from my schedule E?

Thank you!