Home Buying in 10708>Question Details

Kwyjibo, Home Buyer in New York, NY

Co-op tax deductions

Asked by Kwyjibo, New York, NY Sun Jun 8, 2008


The cost of owning a Coop is the my own mortgage plus the "maintenance" fee from the Coop. Am I right to say:

1) The "maintenance" on a Coop has three parts: (a) the portion for the up-keep of the Coop (b) property tax (c) the portion that pays the interest of the Coop's underlying mortgage

2) When I file for taxes, I can deduct the property tax and interest of the Coop's mortgage AND the interest paid on my own mortgage.

3) If I had a $1,000 monthly maintenance consisting of $300 on property tax, $500 on maintenance and $200 on interest on the Coop's mortgage, then i could deduct $300 plus $200 a month or $6,000 annually (the annual cost of property tax and interest on Coop's mortgage) from my taxable income?

Assuming my annual interest on my mortgage is $12K and my income tax bracket is 25%. am I right to say that i can deduct $6K plus 12K= $18Kfrom my taxable income and save 18,000 x 0.25 = $4,500 on taxes each year?


Help the community by answering this question:


Hi David -- Your hypothetical calculation is correct. There is also STAR to consider, which at the moment is approximately $1019/year. Different coops treat the STAR deduction differently -- as a monthly deduction once you have qualified for it, as a deduction off the last one or two months' maintenance, or some other way. That also needs to be taken into account in your calculation, as does any assessment which gets added to maintenance, etc. Please give me a call if I can further clarify this for you: 914-559-8084.
0 votes Thank Flag Link Wed Jul 14, 2010

Most municialities offer STAR. The basic STAR program is as of right. The program has been changing for example this year there was a one time additional check from the State which was income based.

The "offset' comments refers to the fact that STAR is a rebate on your school taxes. So that portion of the maint deduction has to be reduced so you do not "double dip" the tax deduction. It is not a big deal.

You may find that there is the occaisional bldg that does not give out STAR because they kept it in lieu of a maintenance increase. That is perfectly legal.

Any other questions please email me through my website below. I will be ahppy to answer.
0 votes Thank Flag Link Mon Jun 9, 2008
Hi Peter,

Does everyone qualify for the STAR reduction? Does every Coop offer STAR?

Also could you please clarify what you meant by "This is on top of your coop deductions except for the
taxes where there is an offset. "

I thought i could deduct both the interest on coop's mortgage AND the property tax in addition to the deduction on my own mortgage interest?

Hi Patty,

Thanks for the info

0 votes Thank Flag Link Mon Jun 9, 2008
Yes David ,
In my prior life I was a CPA , Yes . You are right on every count . You have now passed the CPA exam ! :)
Ah .....but also think about higest and best use for your money !!!!
Enjoy that apartment and let us know if you choose Bnxville or PO !
Web Reference: http://joan.prucent.com
0 votes Thank Flag Link Mon Jun 9, 2008

You are right on the money! Most buyers draw blanks when I explain this. Keep in mind you can in most instances get the STAR deduction, which varies by municipality. In Yonkers it works out to roughly $96/month (will change 7/1). This is on top of your coop deductions except for the taxes where there is an offset. It does defiantely reduce your monthly costs.
0 votes Thank Flag Link Mon Jun 9, 2008
Hi David, Each building can be different. The most common for taxes would be about 50% to 55% percent. It also depends if it is Bronxville Schools or the Bronxville PO. If you have any more question please feel free to contact me. Patty Breen 914 804 1126
0 votes Thank Flag Link Mon Jun 9, 2008
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