Maintenance

Not enough information. I'm sure people will attempt to answer you, but you should take answers with a grain of salt. Here are questions though that will help you answer this yourself.
1) Compare your building to Similar buildings in the area(to factor out real estate taxes)
2) Compare your building to ones of similar size( to factor out efficiencies of larger buildings)
3) Compare your building to ones offering similar amenities

A mortgage on a coop in of itself is not a bad thing, but you should speak to the managing agent and find out the reason behind the debt and if it was for capital improvements etc.

Riversider has all good points you ought to consider.

You'll also want to know history of special assessments. If there have been none and they do it all through maintenance, that would explain some of the lack of deductibility.

Also, what is history and amount of increases over past 5 years? You want to see slow, steady change. Not fits and starts and schizoid approach.

thanks.....its a prewar coop on park and 37th....50 park avenue........im comparing to a post war coop on lex and 35th and the mtce is almost half 132 e 35.......so 50 park is moderately high and 132 e 35 is low.......they both seem to offer the same amenities ...only differance is that 50 park is a 'grander' building in prime murray hill park avenue......

Generally speaking, lower maintenance goes with lower tax deductibility for like buildings. And in gerneal, lower tax deductibility is a sign of a better building not a worse one (exception: land lease buildings). The two items which are tax deductible are RE Taxes and Mortgage Interest. High deductibility usually stems from high underlying mortgages. Lower deductibilty actually indicates that MORE of a building's expenses are going towards "CORE" stuff to maintain the building, unless you are calling CORE stuff paying off a too high underlying mortgage.

Buildings with lots of amenities (especially when those amenities are personnel, like a doorman PLUS a concierge desk PLUS an elevator operator have higher maintenances and lower deductibility. But there's something to think about: when you prepare your taxes, they don't ask you what percentage of you maintenance is deductible, they ask you to put down an amount. So, if two buildings have different maintenance because of amenities, while the maintenance is higher, the DOLLAR AMOUNT of the tax deduction will be the same anyway.

30yrs: I'm not sure I follow your last comment. At year's end the coop provides a statement of your share of building mortgage interest paid and the amount of RE taxes paid. That is what one reports and deducts. Not the total amount of maintenance paid. What am I missing in what you wrote?

Yes. But what they give you is a statement with dollar amounts for RE Tax and Mortgage interest paid. So, for example, if you had a monthly maintenance of $1,000 which was 50% tax deductible or a $2,000 which was 25% tax deductible, you would get the EXACT same statements listing $6,000 worth of tax deductions. The IRS doesn't even know what you paid in mtc, all they get is the bottom line gross numbers for RE Tax and Interest. So, again by example, if the buildingd did something like ad a shift of doorman and the two maintenances went from $1,000 to $1,150 and $2,000 to $2150 respectively, while in each case he percentage tax deductibility of the mtc went down, it didn't have any REAL effect on the tax deductibility of either of the two mtc's, because the only real number which matters in the end is the dollar amount yo get back on your taxes, and in this case, it wouldn't change one lick.

BTW, that's a fancy statement. We get just a form letter from the accountant saying "$x.xxxx per share RE taxes and $y.yyyyy per share mortgage interest," and we do our own calculation.

The percentages sellers cite are always a bit off, as they're apparently based on current maintenance and last year's expenses.

"BTW, that's a fancy statement. We get just a form letter from the accountant saying "$x.xxxx per share RE taxes and $y.yyyyy per share mortgage interest," and we do our own calculation."

Are you sure? They are SUPPOSED to prepare IRS forms. If they aren't, they aren't doing their jobs. You should be getting 1099's.

Ah ha! Just looked at my 2007 and 2008 tax stuff. There's the letter with per-share numbers for both years. For 2007 but not 2008 there's also a 1098 with the mortgage-interest amount. Seem to remember seeing a 109x for previous years, too. How soon I forget....

Just one small clarification- the only thing that's deductible is the mtge. So I'm not sure what you mean by CORE amenities. If you are comparing with a similar building with the same maintenance, there are 2 options- either your building has better amenities or your building is spending more on the same amenities. If the former, and you are in favor of those extra amenities, you're good to go. If you think the extra amenities aren't worth it, or you have the same amenities as a comp, less good.

"the only thing that's deductible is the mtge"

No. RE Taxes also.

It's a little off-topic re: yearly tax deductions, but upon selling a coop you can deduct from your capital gains your share of capital improvement expenses (usually measured as the total of any special assessments during your tenure) as well as something else which I can't quite recall--some amount per share that appears in an annual letter you receive and upon selling you do some figuring and your accountant deducts it from capital gains. Anyone know what I'm talking about? I just can't remember...depreciation maybe???

kylewest, maybe reductions in mortgage principal. The above-mentioned letter refers to there not being any, in my building's case.

"you can deduct from your capital gains your share of capital improvement expenses (usually measured as the total of any special assessments during your tenure)"

Not exactly true: if a capital improvement was paid for thru the reserve fund and not by a capital assessment, i do nor think you can deduct it.

30yrs: I think we are actually agreeing. The reason you can deduct special assessments is that they are deemed the best way to figure out your share of capital improvements. Granted, some special assessments are not for capital improvements, and some reserve fund expenditures are but would be missed by only deducting special assessements. Yet, trying to divy up a reserve fund expenditure would be a tax nightmare and open issues such as determining how much one contributed to the reserve funds that were actually spent (among other complex interest issues,etc. I imagine). So the compromise the IRS seems to accept is to deduct from one's capital gains the special assessments paid over the period of being a shareholder.

As usual, we are agreeing - it's more that I think people might have read the wording "usually measured as the total of any special assessments during your tenure" as meaning that they could also find other ways, like taking the amount spent for a new lobby, etc. and taking "their share" as a deduction even if there wasn't a capitol assessment for it, and I was trying to clarify.

I said "usually" only because I do not believe there is an IRS ruling precluding other measures or mandating the special assessment method of determining capital improvement deductions. If you could come up with a compelling alternative, it may be allowed. Personally, I don't relish the idea of convincing the IRS of anything so I do things the most non-eye-raising way. Yet, for those more daring, I include the work "usually" in my prior post. 30yrs is correct: it doesn't really imply there is an actual alternative.