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In calculating flip tax, do co-ops allow shareholders to first deduct any improvements they made to their apartment?
Join the Conversation Comments (4)Thanks for your answer but I believe you misunderstood my question or I didn't phrase it properly. I'm not asking about one's personal taxes; rather, if co-op boards allow a shareholder to deduct improvements made to her/his apartment before calculating the flip tax. Thanks.
If a down payment was not required to purchase a Co-op in the past and now the board requires a 20% down, can they implement this without shareholders approval?
Your proprietary lease should address this. If it does not, the Board may change the requirement without a shareholder vote.
A flip tax does not deduct any improvements. It is only concerned with the final sale price of the apartment (or whatever structure it may follow), unless expressed otherwise.
deduction is a slippery slope. was discussed as an option and you can't do it that way - how would you allow for depreciation on improvements? total sale price is the only way to do it.
It is up to the Proprietary Lease to determine the requisites and details of the transfer fee. Some are based on flat percentages, some not, some on profit, some on other factors... it is best to ask you Manager to decipher your particular flip tax for you.
~AR
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Yes you can deduct your home improvements when you sell your apt. and house. Also $250,000 per you and $250,000 for your spouse. Your question is just in time to do your 2018 taxes. Please bring your questions up with your accountant who will best advise you in this matter. Best of Luck.
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