Estimating tax savings on co-op maintenance fees

She's confused. The percent deductible includes both interest on underlying mortgage and RE taxes. 30% couldn't possibly be mortgage interest alone.

The tax letter from the co-op's accountant should've gone out last month. Get a copy from the broker. That'll tell you $ per share for interest and $ per share for RE taxes. Multiply by the apartment's shares and divide by the apartment's total 2010 maintenance to get the deductible percent.

Or, get the 2009 financials and divide interest + RE taxes by maintenance income.

The deductibility of both of those may go away any year now -- Iraq and Afghanistan have to be paid for somehow -- so don't plan on them. They don't really save you much anyway.

Let's say maintenance is $2,000 per month, is really 30% deductible, and you're not subject to AMT. If your total marginal US/NYS/NYC tax rate is 50%, then effective maintenance is $1700 per month.

I gotta know, seriously, how many people paying for apartments in NYC are NOT subject to AMT??

Newbie, in case the AMT commenting passed you by, if you are subject to AMT, the property tax deduction buys you nothing. The interest buys you 28% on federal (subject to the $1M limit, I would presume). You don't get anything for state/city on taxes, and on interest you are only helped (by another 10%) to the extent that the interest you pay puts you above the standard deduction amounts ($15K for couples).

So in NWT's example, it becomes more like $200.

Watch out for Obama tax proposal announced today to limit the deductions for high earners.
Bad idea to stretch the purchase if it hinges on the tax deduction

I have the same question on AMT as NYC10007.

A couple years ago, a tax accountant told us that there are two ways to escape the AMT - make too little, or make too much. We have not (to date) escaped, ever. Has anyone made too much and thus not been subject to the AMT?

Yes. Married NYC couple with no children and no other deductions will NOT be subject to AMT if their income is high enough, because they are already paying the max in tax, which is above the AMT limit...I know, did not have to pay for several years

Depends on the mix of earned income vs cap gns, qualififed dividends. AGI doesn't have to be very high, to get hit by AMT, if you don't have earned income.

Thank you all very for your comments, this is extremely helpful.