Depends on the complex, no general rule.

Anna
917-576-5376
abrocco@laffey.com

Hi Kelly, Each coop has their own tax deductibility. Some buildings may have 50 tax ded- while others may only be 38-45%. Check with the management office if the agent doesn't have a clue. Also very important is the flip tax. Try to find 100% equity- where when you sell you do not have to pay anything back to the cooperative-or $5.00-$10.00 per share (something minimal) Some of them are thousands!!

Figure 40%, I would think it is usually in this area.

Thus, figure out the total amount of interest you will pay over the year. Then multiply the yearly maintenance by .40, and add it to that figure for interest. What ever that total is, that will be the amount that you can possibly deduct on the itemized s1040 form. If your interest, real estate taxes, state & local, and charity totals do not exceed your standard deduction, then its pointless.

Most new homeowners have itemized deductions exceeding their standard deductions. But don't forget, you actually want to get off the itemized 1040 onto a regular 1040. Why? Because itemizing means that you are either paying a lot of interest, or a lot of taxes, or both. Paying more taxes is diametrically opposed to building wealth- it is a zero sum game. Paying more in interest is a toss up- if you paid more interest because you borrowed with a HELOC to buy investments it could be good, but if you borrowed simply to go to Australia for fun not so good. Paying more in interest without a HELOC, that is your first home's interest, could be good, if you didn't saddle yourself with a property you can't afford, don't like, or won't appreciate. And realize that although interest might be tax-deductable, it is still interest, and that means that the government is only picking up a piece of the LOSS that you incurred through interest. Whether that interest turns out to be a wealth building investment can only be seen over time, but in the short term, it is a LOSS nonetheless.

My tangential rants with HELOCs aside, my point is simply that interest being tax-deductable shouldn't guide your purchase of your co-op. It should be the salve that soothes the pain of paying so much for owning your own place.

Part of the maintenance on a co-op is tax deductible.(The part that goes to the property Taxes on the Building & lot) The percentage is determained by how much of maintenance is th property tax and the selling agent can tell you that. It may be on the listing agreement.