Is it true that 50% of a coop's maintenance is tax deductible? What about Condo maintenance fees?

Asked by Ira, 11218 Wed Mar 3, 2010

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Joseph Hastings’ answer
Joseph Hasti…, Agent, Bayside, NY
Sat Mar 6, 2010
Hi Ira. The short answer is no, it is not true. The percentage will vary from building to building. Check this before you sign any contract.

Condo common charges (you referred to as maintenance) are not deductable. Unlike a Coop that includes the property tax portion in it's monthly charge, you get a separate statement for property tax when you own a Condo. Your common charges go to the upkeep of the building and many other things like liability insurance, snow and garbage removal, doorman, etc. As such, no deduction.
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Mitchell Fel…, Agent, Brooklyn, NY
Wed Mar 3, 2010
Dear Ira:

That is not true. With a co-op the amount of the maintenance that is tax deductible is based on the portion of the maintenance that is used to pay real estate taxes and interest on the co-op building's underlying mortgage. You cannot use a percentage as a general rule of thumb as each co-op is different. Some may be 50%, others may be 10%. If the co-op building has no underlying mortgage the tax write off may be very small.

If the tax write off is important to you, as you look at co-ops you have to inquire through the listing agent and/or management company exactly how much of a write off you will receive. Usually you will be given a dollar per share type number. Keep in mind that the write off will vary from year to year as real estate tax amounts and interest paid on the underlying mortgage change from year to year (they usually go up which means a higher tax write off).

With condos it is rare that you will get any type of write off with regard to the common charges. However, keep in mind that if you take a mortgage on a co-op or a condo, the interest you pay on your mortgage will also be a write-off on your income taxes assuming the property is your primary residence.

If I can be of further assistance please let me know. Good luck!!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Cellular: (917) 805-0783
1 vote
David Rogoff…, , Brooklyn, NY
Wed Mar 3, 2010
Dear Ira,

We have found that sometimes the listing agent may not be aware of the specific percentage of tax write offs of the maintenance cost. We have dealt with many buyers that naturally assume a 50% deductible savings which is incorrect.

Annually, the co-op shareholders will receive a statement from the management company or Board identifying the percentages of tax write offs of the maintenance. Your Realtor should provide this information to you.

Be advised that these amounts may vary from year to year particularly if there has been some refinancing of the co-op's mortgage. A percentage of your maintenance charges are allocated to that. Also be aware there may be additional tax credits if you are disabled or over 65. Make sure you check with your accountant.

It is less likely that any of your condo common charges will be tax deductible. Once again, obtain this information from the seller or listing agent.

Best regards,

Bonnie Chernin & David Rogoff
Coldwell Banker Mid Plaza Real Estate
Cell: 917-593-4068

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My coop board refuses to tell me what percentage of my maintenance fee is tax deductible,. I have lived here for about 18 years. I think lost a lot of money because of this . I want to sue them for all my loses but theyes still will not tell me the percentage I pay in taxes help what can I do?
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Anna M Brocco, Agent, Williston Park, NY
Wed Mar 3, 2010
Your agent can best advise you--Not necessarily, and the 50% can vary depending on the complex, underlying mortgage, your personal finances, etc.--Your tax consultant can advise you as well as to what to is deductible once you narrow down the complex of choice.
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Barry Koven, , Brooklyn, NY
Wed Mar 3, 2010
I am Home Mortgage Consultant in New York City and I am thouroughly familiar with Coops and Condos. For coops I think people use the "50% tax deductable" number because it is an average that is common and true a good portion of the time. However the actual number will vary from person to person based on your filing status (self employed vs salaried, tax deductions, income level, etc.) and it will vary from building to building as well depending on the buildings status, is there an underlying mortgage on the building for example. Once you find an actual coop you are interested in your attorney will get the financials for the building and/or the realtor may know the status of the building and you would need to share that information with your CPA to determine exactly how it will e\affect your tax deductions. Regarding Condos I would also suggest you consult with a CPA but as a general rule it is my understanding the common charges are not tax deductable although all of your mortgage interest is deductable in both sceanrios. I hope this helps and please feel free to call me any time for more information at 718-780-9103
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Scott Godzyk, Agent, Manchester, NH
Wed Mar 3, 2010
Ira there are alot of variables in that to some it may be and others it is not. if it is your principal residence than no, you can not deduct maintenance fees, if it is an investment you can. On a co op you can deduct any part of the fee that goes towards property tax, the maount needs to come from the management. You cant just come up with a number.
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Don Tepper, Agent, Burke, VA
Wed Mar 3, 2010
I'm not an accountant, so this isn't accounting advice.

And I don't know about a coop.

Regarding condos, if you're living in the condo, no the maintenance fee is not deductible. Slight exception: If you've got a home-office in your condo, then you can deduct that portion of the condo fee equivalent to the proportion of the condo being used as a home office. In that case, that portion of the condo fee would be a business expense.

If the condo is a rental--if you're renting it out and declaring your income and expenses on your taxes--then the condo fee is an expense that you can deduct.

Check with an accountant for more information.

Hope that helps.
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