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Urban aid bill clarifies IRS 277.

The urban aid tax bill (H.R. 11) passed by the Senate today includes provisions of Sen. Daniel Patrick Moynihan's (D. - N.Y.) bill (S. 2149) to clarify the tax treatment of housing coops. The House of Representatives passed the bill on Tuesday.

The bill specifies that section 277 of the Internal Revenue Code does not apply to housing co-operatives, so that interest income from reasonable reserves maintained by the co-op, as well as income form laundry and parking facilities, will not be treated as fully taxable.

Instead, this income will be eligible to be offset by housing related expenses incurred by the co-op. For limited equity co-ops, the provision would provide similar treatment for commercial rents as well.

The House had earlier agreed to a measure providing limited relief for interest on reserves, while the Senate had voted to accept Sen. Moynihan's much broader bill. This final agreement accents the Senate approach.
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Title Annotation:clarifies tax policies regarding housing cooperatives
Publication:Real Estate Weekly
Date:Oct 14, 1992
Words:153
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