New York's Cooperative and Condominium Community

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Tax Deduction/Depreciation

IRC SEC. 216

A tenant-shareholder in a cooperative corporation will be allowed as a deduction the shareholder’s proportionate share of real estate taxes, as well as the interest on the corporation’s indebtedness.


"Every co-op has to be concerned not only with the laws of governance but also with the tax laws. Special tax laws were created to give co-op shareholders tax advantages similar to those enjoyed by homeowners. Boards must remember that in order to keep these tax benefits, the rules concerning non-shareholder income must be followed, and that when issuing new shares, there must be a reasonable relationship between the new shares and all outstanding shares. If you fail to comply, there are real fiscal and monetary consequences."

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