Today we're going to walk you through
how to use the co-op maintenance tax deduction calculator available at Hauseit.com
The purpose of the calculator is
to figure out what percentage of your monthly maintenance is deductible on
your personal income tax return
customarily as a co-op owner also known
as a shareholder you receive an annual co-op tax deduction letter and this
letter will specify the per share
amounts that you would be able to deduct
on your personal income tax is assuming
that you itemize deductions on your
personal income tax return
add the per share interest amount with The way to compute the deduction is essentially to
the real estate tax amount, take that
combined figure and multiply it by the number of shares that you have
Then you would take that number and you would
divide it by the total annual co-op maintenance that you paid for that particular unit
A typical co-op tax deduction percentage in New York City is
anywhere from 40 to 50 percent as a most
common figure alternatively it is possible to see one that is higher
perhaps 60 percent or more or something closer to 30 percent the extent to which
you can deduct these things on your tax return really depend on how much in
mortgage interest your co-op is paying
in other words how much do they have in mortgage interest your co-op is paying
loan exposure what is their interest rate and also how much in real estate
taxes they're paying every year
So what you would do is you would go to the
calculator here and you would basically just take these figures from the tax
deduction letter and plug them into the calculator
So the interest deduction is approximately three dollars and 51 cents
a share so we would put that in here and the real estate tax deduction is about
thirty six dollars and 38 cents a share
so we would put that right here
Now the number of coop shares owned is something that you're managing agent
would be able to tell you alternatively your real estate attorney would know and
you would put in the number of shares here let's just assume in this case that
you have 300 shares and hypothetically let's say that your properties
maintenance is 15 20 to a month we would take 15 22 and drop it in here and you
can see that it's essentially already calculated your deduction amounts. The
total annual dollar co-op tax deduction figure is about 12 K and as you know
here you're paying about 18 thousand a year in maintenance so roughly 12 K over
18 K gives you about 65 percent in terms of a tax deduction percentage. Quite
frankly, this is pretty high so you wouldn't expect naturally to see that
but just to emphasize common figure is between 40 and 50 percent. Once you've
completed the calculation you can email the results to yourself if you'd like or
you can print and download a PDF. If you are thinking of selling you might be
interested in taking a look at a couple other calculators on the house--it
website one of which is the seller closing cost calculator. This one is
particularly nifty because it does tell you the total percentage of your closing
costs relative to the sale price and also it breaks down the dollar amounts
of each line item for example if you're selling this co-op and your sale price
is 800,000 you would type in the sale price here select co-op and it would
provide you with a nice breakdown of your closing costs. You can also email
them and you can either print a PDF as well. If you happen to be buying another
good calculator is the buyer closing cost calculator and if you're buying
something above a million dollars you may also be interested in taking a look
at the mansion tax calculator and if you're financing you could take a
look at the mortgage recording tax calculator. Now bear in mind the mortgage
recording tax calculator would only be for condos because the mortgage
recording tax itself only applies to the purchase of real property consisting of
condos traditional houses and land. Thank you very much for watching. If you have
questions, feel free to leave us a comment and if there are any other
topics you'd like us to write about or make a calculator for please do let us
know
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