I believe someone offered you the answer previously: keep it as a separate from maintenance (even if collected with maintenance) so that the assessment earmarked for a capital investment is appropriately identified and segregated.

AdC

HELP> someone who knows - please tell me. thanks

ideally it is a seperate line-item but does it HAVE to be? that is my question - what are the ramifications when a board rols it into a mntnce increase (Please someone who knows the answer.. thanks!) adc - not you. sorry. please .

...but the odds are good that money spent on a new roof can increase basis & reduce your cap gains tax, even if commingled rather than collected separately.

Whether or not an item is assessed does not factor into the definition of "capital improvement."

While it's better if assessments are kept discrete, what you actually spend funds on is more important than how things are labeled on your budget. It's customary to take stock at year-end of what capital improvements--even small ones--were made using funds on hand. [Condo owners should get a yearly report on same to update their own books.]

Focus on keeping good & complete records of the actual improvements made.

What are the implications?

(1) Maintenances are based on routine expneses.
(2) CapEx is a variable expense based on the needs of your builidng based ideally on a schedule.

The most adverse impact of rolling maintenance and capex into one budget would be that maintenance will swing dramatically from year to year.

If your new roof will cost the co-oop $200,000, but next year the isntallation of the new boiler is $110,000, your maintenance will have to fluctuate dramatically to cover the requirements of the capex. Thus, it would be difficult for shareholders to sell an apartment whose maintenance depends on the capital improvements that are projected that year.

This is why operational expenses are separated from capital improvements. To provide a better balance between expected expenses and expenses that require planning, reserves, and other forms of financing.

If you were to look at any annual report or 10K of any publically traded company, capex is a separate table in your presentations and are not rolled into the income statements of the co-op.

What are the implications?

(1) Maintenances are based on routine expenses.
(2) CapEx is a variable expense based on the needs of your builidng based ideally on a schedule.

The most adverse impact of rolling maintenance and capex into one budget would be that maintenance will swing dramatically from year to year.

If your new roof will cost the co-op $200,000, but next year the isntallation of the new boiler is $110,000, your maintenance will have to fluctuate dramatically to cover the requirements of the capex. Thus, it would be difficult for shareholders to sell their apartments whose maintenances depend on capital improvements that are projected that year.

This is why operational expenses are separated from capital improvements. To provide a better balance between expected expenses and expenses that require planning, reserves, and other forms of financing.

If you were to look at any annual report or 10K of any plublicly traded company, capex is a separate table in the presentations and are not rolled into the income statements of the corp.