Loss limits for dwellings apply to co-op apartments

Article Abstract:

The Court found in the 'Holmes' case that the application of the limits on deductions for dwelling units for the owner of shares in a cooperative housing corporation is similar to that for the owner of an apartment or house. The case involved a taxpayer who formed a partnership with his parent to buy shares allocated to his apartment and lease it. He was living in a building that was turned into a cooperative ownership where the corporations are owners and the shareholders are executors of a proprietary lease and inhabitants of the property. Sec. 280(A), which provides limits deduction for a 'dwelling unit' used as a residence, was used to determine the outcome of the case. According to this section, these limits are allowed if a taxpayer employs it for personal purposes for the greater of 14 days or 10% of the number of days the unit is rented at fair market value during the tax year.

Cases, Housing, Dwellings, Tax deductions

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Excess assessments taxable to condo management co

Article Abstract:

It was decided in TAM 9539001 that membership assessments that went beyond the expenses of a condominium management association were considered taxable income due to the fact that these were not constructively refunded to the members. In addition, capital assessments that were not particularly approved by the members were not capital contributions. The taxpayer involved in the case was a management association for a time-share condominium project that consists of 104 apartments. Each of the members owns an apartment for a minimum of one week per year and pay a significant part of their assessments before the start of the year in which they apply, resulting in income from assessments that exceed deductible expenditures. Revenue Ruling 70-604 does not apply because the taxpayer did not refund the excess assessments to the members either actually or constructively.

Real estate management

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Cooperative and condominium ownership offers benefits to associations and owners

Article Abstract:

Condominium owners are fee owners of real property and enjoy the same tax benefits as conventional homeowners, while cooperative owners receive tax benefits similar to those available to fee owners because of special provisions. Condominium associations do not qualify as tax-exempt social welfare organizations, but may qualify for special treatment as a homeowner's association under Section 528; they may find it economically advantageous to forego this election, however. Cooperative housing corporations, on the other hand, are taxable as any other corporation engaged in a trade or business for profit.

Condominiums

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