Passing through Coop loan deduction? ? ?


R

Ray

Our coop housing association is about to take a mortgage for
funds to carry out building renovation.

The loan will be paid by the corporation, of course.

My question is, can the corporation then issue Forms 1098 to
individual tenants so that they can claim a mortgage-interest
deduction?
 
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P

Phil Marti

Ray said:
Our coop housing association is about to take a mortgage for
funds to carry out building renovation.

The loan will be paid by the corporation, of course.

My question is, can the corporation then issue Forms 1098 to
individual tenants so that they can claim a mortgage-interest
deduction?
The interest paid by the association passes through to the
owners, but I don't think you need to issue 1098's.
Evidently your association hasn't previously had a mortgage
on the building, but surely you've been notifying the owners
of their deductible property tax. I'd use the same process.
 
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S

Seth Breidbart

Ray said:
Our coop housing association is about to take a mortgage for
funds to carry out building renovation.

The loan will be paid by the corporation, of course.

My question is, can the corporation then issue Forms 1098 to
individual tenants so that they can claim a mortgage-interest
deduction?
When I owned a coop apartment in New York that's essentially
what happened. (Actually, I don't think they gave out the
official form but a substitute specifying the amount of real
estate taxes and mortgage interest per share, as well
contribution to capital (increase in cost basis).)

Seth
 
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E

Ed Zollars

ay said:
My question is, can the corporation then issue Forms 1098 to
individual tenants so that they can claim a mortgage-interest
deduction?
If the interest meets the requirements of Section 216(a)(2),
then the answer is yes. The IRS has ruled in Temporary
Regulation 1.163-10T(q)(3) that such interest can count as
home mortgage interest, subject to the same limitations as
other interest.
 
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