Can I deduct the property taxes on a home I'm holding the mortgage. Buyer cannot make mortgage and tax payments and I have to pay $8,000 in property taxes or lose the home.

No, not unless the house is also titled under your name as well as the mortgage holder.

For taxes to be deductible, you must have a LEGAL OBLIGATION to pay the taxes as an owner of the property.

I am sorry no, if they are not making those payments, why have you not foreclosed on them, I will assume your loan allows you to do so if they are not paying taxes or payments.

At this point you are giving them gifts paying the taxes and not forcing them to pay or foreclose on them.

I agree with Fr Chuck. Unless the person is a CLOSE relative, you need to foreclose.