A proposal to revamp Section 216's 80/20 rule
Article Abstract:
Congress should modify IRC Section 216 to allow housing cooperatives' total base receipts to be considered qualified housing receipts. The section requires organizations to receive 80% of their gross income from tenant-shareholders to qualify as housing cooperatives. A weakened cooperative apartment market has led to increased investor-owner defaults but, as cooperatives restructure their debt and take over apartments, organizations often face inappropriate Section 216 disqualification under the 80/20 rule.
Publication Name: Journal of Real Estate Taxation
Subject: Real estate industry
ISSN: 0093-5107
Year: 1996
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Section 467 proposed regulations may require co-ops to reconfigure new high-rent commercial leases
Article Abstract:
IRS proposed regulations issued under IRC section 467 on Jun 3, 1996 may eliminate a method used by condominiums and cooperatives to structure high-rent commercial leases for the tax benefit of both lease parties. A cash-method lessor and an accrual-method lessee would be able to structure payments so income inclusions and deductions would be optimal on the long-term lease. The final regulations will likely be very different from the proposed regulations because of such issues as effective date and scope.
Publication Name: Journal of Real Estate Taxation
Subject: Real estate industry
ISSN: 0093-5107
Year: 1998
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IRS stops applying section 277 to housing cooperatives
Article Abstract:
The IRS informally agreed not to apply IRC section 277 to ordinary housing cooperatives after a protracted battle with legal, financial, and professional representatives of such cooperatives. The IRS had refused to follow the Tax Court's 1996 opinion in Thwaites Terrace House Owners Corp. v. Commissioner that section 216 cooperatives fall within Subchapter T and are not subject to section 277 rules. The IRS had been applying a test concerning the availability of proxy voting.
Publication Name: Journal of Real Estate Taxation
Subject: Real estate industry
ISSN: 0093-5107
Year: 1999
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