Real estate taxes and co-op owners.
In light of this analysis, it appears that a shareholder's share of a co-op's real estate taxes is not required to be added back for AMT purposes. The next issue is how these taxes should be reported on an individual's income tax return. Reporting them as a miscellaneous itemized deduction not subject to the 2% limit may trigger a notice from the IRS; the instructions for this item on Schedule A specify which deductions are allowable on this line and Sec. 216 real estate taxes are not included. However, the law, not the form instructions, controls. In the alternative, these taxes could be included as "Other taxes" on Schedule A and added back on Form 6251, Alternative Minimum Tax--Individuals, as an AMT adjustment and then reversed on line 14(n) as a related adjustment.
From Martin Nissenbaum, CPA, Ernst & Young LLP, New York, N.Y., Individual Taxation Committee member (not affiliated with AFAI)
|Printer friendly Cite/link Email Feedback|
|Publication:||The Tax Adviser|
|Article Type:||Brief Article|
|Date:||Dec 1, 1997|
|Previous Article:||Effects of dividends and spin-offs on stock.|
|Next Article:||Once-in-a-lifetime exclusion and rollover provisions on gain from sale of home replaced by new exclusion rules.|