When you own a primary residence you get to write off on your income taxes any mortgage interest you paid during the year and any real estate taxes you paid during the year. When you own a co-op a portion of the maintenance you pay is to cover the underlining mortgage of the co-op building (almost all co-op buildings have one of those!) and also the real estate taxes on the co-op building as a whole.
The portion of the monthly maintenance you pay that covers those items is an income tax deduction for you to claim when you do your taxes. Usually this amount will be reflected as a dollar per share amount on an annual basis, or translated into a percentage which I assume in your case would be 40%.
In addition to that, if you take out your own mortgage to buy the co-op, the interest you pay on that mortgage will also be a tax deduction for you. As far as how much money you will actually save on your taxes, it depends on your tax bracket and how you do your taxes. You must speak to your accountant to get clarification on that!
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/ Cell: (917) 805-0783
At the end of the year the shareholders in Co-ops will receive from the management company the deductible amounts for co-op's interest expense and real estate taxes. Your attorney or agent should be able to obtain the documentation supporting the prior year's deductions for your verification.
We agree with Charles that you should always confirm with your tax advisor/accountant or attorney to determine the impact of these deductions on your tax situation.
David Rogoff and Bonnie Chernin
Real Estate Sales Associates
Fillmore Real Estate â€“ Branch 19
Brooklyn NY 11210
917-593-4068 â€“ David mobile
646-318-5031 â€“ Bonnie mobile