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is this clear? windfall for shareholdersMar 11, 2007


If done correctly - ie simply to recoup the total of the abatement amount itself, then non sponsor shareholders experience a windfall. The sponsor's being assesses subsidizes the amount.

some buildings make the mistake of assessing for the total amount of the abatement that appreas on the non-sponsor maintainence bills and forget to do this math.


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standard billing practice? (nm) - -- Mar 12, 2007





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Mike McGowen? - Anonymous Mar 13, 2007


maybe you can address this? it has to do with possible overbilling.


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the math. (any board members out there?) - -- Mar 15, 2007


Is this right? PLease read with care.
Let's say your apartment has a monthly mainteinance of $ 1000. Your tax credit (coop/condo) is $400 to be given to you by May. Your bill for May is then $600.

BUT the board decides to assess for the total of the abatement given to all shareholders in the building. (ie you will pay your portion of the abatement as it is divided among ALL shareholders inc. sponsor - who does not eligible for the credit).

Your portion of this is $250. (because the sponsor has to pay but does not realize the tax credit, which means you pay less than he does and proportionaly less on your bill than the actual credit of $400.) Got it?

You would then be assessed (your portion) but also have a nice windfall of $150 for your May bill . Is this clear? help someone.


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The Math - Einstein's mother Mar 23, 2007


The best math you can do is asking your maangement agent for the tax invoice and exactly figuring out what is the amount of tax each shares is supposed to pay to the City.




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THE METHODS - at Mar 23, 2007


Here is a very simple explaination of the situation and the two ways of basing an assessment that is related to the anual abatement:

Please note ADC's very strong opinion on this. A wonder he did not seem to remember this:

Sat Apr 8, 2006 8:23AM
70.23.184.148

1) method one: the entire buildings abatment is the basis.

2) method two: individual unit's abatment is the basis.

If I had to guess I'd say more buildings use method 1 than method 2 but both are used.

Do you want to maximize the buildings income without penalizing the shareholder? Use method 2.

Do you want shareholders to fee that they at least got some of the abatement? Use method 1.

AdC
Method 2 is ridiculous!
Tue Apr 11, 2006 9:14AM
63.103.93.62

I think I got to the bottom of the problem! You seem to favor method 2 for being "lucrative" and punishing to the sponsor.

First, boards should be motivated by transparency in operations. Ergo, if you are raising the amount of the abatement then declare it as such and don't charge above and beyond.

If you wish to increase the reserve by another $X, then do so and EDUCATE your shareholders for the need to increase reserves for whatever reasosns are demanded:

Thinking you get something from the sponsor may be counterproductive. Fairness in operations will lead a sponsor to cooperate with you more times than not. Sponsors too can read through the lines and regard the board of your building as a crooks and unprofessional. Temptation is great, but you lose your credibility too!

Sorry, but this is my opinion.

AdC




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Abatement and Assessment - BP Mar 24, 2007


Re: abatement and assessment, at this point I'm forgetting who said what and even who originally asked the question.

To whoever brought this up - have you talked to your coop's CPA or accounting dept? If I overlooked or forgot this, I apologize for asking. They should advise you on the best method to use and how to calculate it, and do all the math for you. If you're paying them to do a job, let them do it.

Advice here is valuable but I think an inordinate amount of time and effort is being expended on this discussion. And if the person who brought this up has made sense of all the replies and come to any definitive conclusions, you're a better man than I am, Charlie Brown.


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