maintenance and tax deduction

In a co-op, your share of the building's RE tax and underlying-mortgage interest is deductible. (It's not a credit.)

E.g., of the $25,200 I paid in maintenance for 2009, $12,200 was for RE taxes and $1,400 for mortgage interest, so in an ad I'd say "maintenance is 54% deductible."

In a condo, you also deduct your RE taxes, but there's no underlying mortgage.

In a coop, you can also deduct any "special assessments" from any capital gains you have upon sale of the apartment.

just to expand the 54% deductible only relates to certain taxpayers.i believe if you are in AMT you get very little benefit for real estate taxes so although you may be 54% deductible your actual benefit is much less. also for high income, nys and nyc severely limit itemized deductions.

Let's say two unmarried people own property together. One gets hit by AMT, one does not get hit with AMT.

Can the one who does not get hit with AMT pay the entire maintenance/property taxes and take the full deduction? (Presumably while the other pays more toward the mortgage and takes that deduction?)

I know the Obama tax credit works this way -- i.e., one unmarried partner can take the full $8k credit even if the other one is not eligible. Not sure about the property tax deduction, though.

are NYC real estate tax and mortgage interest deductible on both federal and state ?

Yes.

to add to benefits upon sale, I believe the cumulative amount of mortgage interest over the years is added to the original purchase price so sum of both is deducted from final sale price to determine the taxable gain.

Birdier: incorrect. You cannot deduct interest twice. You deduct from your state and federal taxes the share of monthly maintenance you paid that was for the building's underlying mortgage. As I said above, the only thing that changes your cost basis upon resale are monies paid as special assessments--these can be added to the seller's cost basis (along with any capital improvements, of course).

I should have been clearer: on your annual tax returns, you can deduct the portion of maintenance payments you made that were used by the building to pay for the coop's mortgage interest. You claim such deductions annually--there is no additional deduction upon resale.

how come you get to claim on both state and federal and not just one? seems like kind of a double dip no? not that Im complaining...

They're deductible on both just as your charitables, share-loan interest, etc., are.

Birdier, you're thinking of payments on underlying-mortgage *principal*. Those are added to your basis.

The co-op's accountant's annual tax letter will tell you dollars per share of RE taxes, underlying-mortgage interest, and underlying-mortgage principal, if any.

What's the deadline for my co-op to send me my tax information? It's the only paperwork I haven't received yet.

anyone know how an assessment gets treated as far as taxes are concerned ?

Coop assessments are, upon resale, are treated as capital improvements. This is so regardless of what the assessment was actually used for. It is a bright line rule of convenience. So even if 90% of a given assessment was used for window replacement by the coop but the left over 10% was used to partially offset maintenance increases for the next year, you still get to treat all 100% as a capital expense when you resell the unit. On the other hand, you cannot deduct as a capital improvement money spent from the reserve fund or other revenue streams that in fact did go for capital improvements. Say you move into a building with a $1MM reserve fund and the next month the building spends $500K on facade work. You cannot deduct any of that when you sell. In sum: assessments alone are treated 100% as capital expenses for tax purposes in a coop and only upon resale. (nb: I am not an accountant or providing legal advice here--this is for general background as I understand the rules. You should rely only upon advice from your attorney and/or accountant in this regard).

Very Helpful . Understood . But what about for current year tax deductions ?

marco, I thought I was clear. I guess not. Assessments play no role whatsoever on taxes until you sell your coop. They have no impact in any other year. Even if the assessment in 2011 was for window replacement and 100% of the assessment was spent on window replacement, you cannot take any deduction. None. You must wait and total up all assessments at time of sale. I don't recall if you add the total to your cost basis or deduct the total from any capital gains, or if there is even a difference. I'm not a numbers guy.

In general, what percentage of mortagage interest have people gotten back in refunds ?

It seems that RE taxes make up the majority of maintenance and you lose that deduction with AMT.

"Let's say two unmarried people own property together. One gets hit by AMT, one does not get hit with AMT.

Can the one who does not get hit with AMT pay the entire maintenance/property taxes and take the full deduction? (Presumably while the other pays more toward the mortgage and takes that deduction?)"

Does anyone know the answer to this question?

what are people's RE tax percentage of maintenance ? we are 36%..small non doorman elevator building.

Just shy of 50%.