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Sample Co-op Tax Deduction Letter

What does a sample co-op tax deduction letter look like? Is it the same as the Form 1098 your co-op mails you for tax season?

When you’re listing your co-op apartment for sale, you’ll need to know key facts about your apartment such as the number of shares you own and what percent of your monthly maintenance is tax deductible. Instead of guessing what percent of your maintenance is tax deductible or doing a complex calculation from the financial statements, simply retrieve the co-op tax deduction letter your co-op corporation mailed you! This co-op tax deduction letter is formally known as IRS Form 1098 and tells you exactly what portion of the building’s real estate taxes and interest you paid as a shareholder.

As long as your co-op is compliant with Section 216 of the tax code and is primary engaged in being a housing cooperative versus other business activities, shareholders will be able to deduct their portion of the co-op corporation’s real estate taxes and interest!  Learn more about the differences between co-ops vs condos as well as condops in our blog!

Sample Co-op Tax Deduction Letter

Note: Your cooperative corporation or your building’s management company should mail you your co-op tax deduction letter by January 31st of each year!

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Sample Co-op Tax Deduction Letter

Gotham City Corporation 111 Broadway New York, New York 10017

January 21, 2017

TO: Stockholders of Gotham City Corporation


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 and real estate taxes paid or accrued by the housing corporation.

These deductions are available only if you itemize deductions on your personal income tax return. If you owned your shares for less than the period shown above, you must prorate your deductions, otherwise multiply the number of shares owned by you, as indicated on your stock certificate by the amount per share stated below.

*If you have received any real estate tax abatements such as the New York City Co-op and Condo Tax Abatement, School Tax Relief (STAR), Veterans Exemption, Senior Citizen Exemption or the NYC $400 Real Estate Tax Rebate, you must reduce your gross real estate tax deduction by those amounts.

If you have any questions, please consult your tax advisor, we cannot provide tax advice to individual shareholders.

For the calendar year 2016, your Per Share deductions are:

INTEREST $2.3521 per share

*REAL ESTATE TAX/GROSS $29.1236 per share

Assessments for capital improvements constitute contributions to the capital of the corporation and may be added to the basis of your investment. Contributed capital in 2016 was $0 Per Share.

Please retain this letter for future reference.

What other information do I need to gather before selling my co-op?

After you’ve found your co-op tax deduction letter and figured out the percent of your maintenance that is tax deductible, you’ll need to procure a few other basic pieces of information to be able to list your apartment. These include the number of bedrooms and bathrooms, total room count, what floor your unit is on, monthly maintenance, flip tax, max financing allowed, number of shares owned, pet policy, unit condition, unit view (i.e. open, obstructed or partially obstructed), unit exposure (i.e. direction windows face), broker showing times and instructions, first showing date, whether the unit is occupied, open house times, listing description, listing price and commission offered to buyers’ agents. You can submit your listing details online at Hauseit and we’ll list your home on the RLS (i.e. NYC’s Multiple Listing Service) and dozens of other sites like StreetEasy within 48 hours.

Once you’re well underway with your sale, you’ll need more detailed information such as the building’s financial statements, proprietary lease and assessment information. You can find a complete list of documentation you’ll need for your NYC co-op apartment sale in this article.

Please note: this article is not intended to serve as legal or tax advice.  You should consult your lawyer and tax attorney for all aspects of your real estate transaction.

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2 thoughts on “Sample Co-op Tax Deduction Letter

  • Patricia Sandler
    on January 25, 2018

    In my opinion co-operative apartment shareholders are not property owners and are not treated as property owners pursuant to NY State tax law. Co-ops are treated as commercial entities, not private “homes.” Therefore the new Tax Bill just passed should allow shareholders to deduct their business expenses, that is, mortgage interest on the building, not end-loans and any costs that result from administering that business.

  • Riddhi B.
    on March 28, 2018

    Hi Patricia, I think everyone is in agreement that co op apartments are definitely not considered to be real property. That’s why they aren’t paying property taxes directly like condo owners.

    In fact, it’s the cooperative corporation that is the actual real estate owner here, of the entire building in fact. Therefore it’s the coop corporation that is paying NYC real estate taxes. The co op shareholders indirectly contribute to their share of the building’s taxes through their monthly maintenance fee. And as this article states, they get a Form 1098, aka co op tax deduction letter, by Jan 31st of each year to learn what exactly they paid in terms of property taxes etc. on behalf of the building.

    By the way, since you asked about the new tax reform and law, Hauseit actually came out with an updated guide on NYC real estate taxes and taxes in general, updated for the Tax Cuts & Jobs Act of 2018.

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