I live in a six-unit coop apartment building, and we are considering taking out a large loan to make improvements.
The question is, how do we make the interest payments deductible to the individual shareholders? (All apartments are identical in all respects.)
Does the coop itself issue forms (I forget the number) to allow deductions on personal returns?
I have a client in a coop. I am looking at a form letter that has her unit number entered along with the property tax and interest assigned to her unit (and paid as part of her monthly fees). The letter offer the Homeowners' Corporation's Tax ID as well. It is not a form, just a letter as I described. Disclaimer - I can't vouch that this is definitely the proper way, just my only experience with tax/interest as a pass through. JOE
If the loan is a mortgage, the interest on the mortgage is distributed to the shareholders.
The one I used to live in did. Both real estate taxes and mortgage interest (deductions) were distributed.
Seth
Handle it the same way you handle the existing mortgage and property taxes.
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