Mortgage Interest Tax Deduction
Pursuant to the provisions of Section 216 of the Internal Revenue Code, a tenant stockholder of a cooperative housing corporation is entitled to an itemized deduction for a proportionate share of interest paid or accrued by the housing corporation (co-op). These deductions are only available if you itemize deductions on your personal income tax return. If you owned your shares for less than the entire calendar year, you must prorate your deductions; otherwise multiply the number of shares owned by you by the amount per share. Should you have any questions regarding the application of the equivalent per share deductions in your tax returns, please consult your personal tax advisor.
Real Estate Tax Deduction
The proportionate share of real estate taxes eligible for pass-through to stockholders is based on the gross amount of real estate taxes paid or incurred by the Corporation. This deduction is only available if you itemize deductions on your personal income tax return. Present and past stockholders who were not stockholders of the Corporation for the entire year of 2018 are entitled to a proportionate share of the deductions for the period of their ownership.
The per share real estate tax deductions on the annual co-op tax deduction letter are usually not adjusted for the benefits qualified stockholder may have received pursuant to the New York City Coop/Condo Real Estate Tax Abatement Program, Veteran’s Property Tax Exemption, Senior Citizen Exemption and State School Tax Relief Program. Those qualified Stockholders who received credits for these abatements and/or exemptions should consult their personal tax advisor to determine the adjustment to be made to reduce their real estate tax deduction by the credits received.
Should you have any questions regarding the application of the equivalent per share deductions in your tax returns, please consult your personal tax advisor.
Co-op shareholders make one maintenance payment each month to contribute towards the operating costs of the co-op as well as real estate taxes. Unlike for condos whereby each owner pays individual property taxes, a co-op corporation pays taxes to NYC on behalf of all owners and the entire building. Therefore, condo owners have two separate monthly payments: common charges as well as property taxes. We compare condo common charges and co-op maintenance payments in this article.
Last Updated: 3/19/20
Disclaimer: Hauseit’s Co-op Maintenance Tax Deduction Calculator provides estimates that are meant to be illustrative and used for reference purposes only. The exact flip tax varies by building. Please consult the closing statement your real estate attorney will provide you for your exact closing costs. Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).