November 11, 2009

Audit Hell

My husband and I own a three family brownstone (we live in the bottom) and rent out the top two apartments. We have just been audited for 07 and 08 and need to pay back in full all the deductions we received for maintaining and fixing up our apartments.

We can fight it if we can prove that we spend over 750 hrs managing our apartments/tenants needs etc (easy), and I think as well we need to prove we are real-estate professionals (that one of us spends more than 50% in the real-estate industry (we don't as both have work in other professions).

wanted to see if anyone has any advice, been successful in winning a similar case and if you do need to prove your a real-estate pro. We have engaged an IRS lawyer but before we start racking up his fees want to see if we should suck it up and pay it all back.

Cheers

Mansion Tax

I'm looking at buying a 1 family house for around $1MM in cash. I've seen different explanations of the mansion tax. Can anyone confirm if it is just on the sale price, or is it the sale price plus closing costs /taxes (if over $1MM)?

Any idea on what the closing costs would be on a home this price? I know that no mortgage avoids many taxes and costs, but would appreciate a rough figure.

November 4, 2009

Easement Audit Nightmare

After being audited by the IRS in 2006 for the easement deduction we took in 2004, we were just handed a bill by the IRS for $145,000. We plan to fight the IRS and want to know if anyone else is on our position. Our brownstone (which we have since sold) is in Fort Greene, it was appraised for 1.2 million in 2004, and we deducted @ 90,000 over the next three years. The bill the IRS sacked us with included interest and penalties. We went on to sell the brownstone in 2007 for 1.8 million, so we feel confident our appraisal was on target. We are currently looking to hire a tax lawyer, and have several names, but would welcome any recommendations. We are aware that a similar case in Brooklyn has already gone before the court and is awaiting a decision. Any advice and/or information is greatly appreciated.

October 22, 2009

Certificate of Occupancy

We are about to buy a small one-family in CH that does not have the CoO on file (but listed as one-family on tax papers). Are we going to have to get the CoO? (we are planning extensive renovations - but no modifications to the floor-plans). In both "yes" and "no" scenarios - will our taxes increase vs the current year assessment?

if anyone can elaborate on this- we will greatly appreciate it! we never owned a home and have troubles understanding the property tax issues.

Thanks a lot!

October 2, 2009

Property Taxes and Co-ops

I am about to purchase a co-op and am really confused about how real estate property taxes will work. Are my property taxes 100% covered in the monthly maintenance? I also hear that the tax portion of the maintenance is then tax deductible. Finally, I hear that it is beneficial to close late in the year for tax purposes - why is this so?

Anyone can shed some light on these questions for me?

September 24, 2009

Prop Tax Hearing

I am going in for a hearing to review our property tax assessment - it has been much delayed and the bottom line is we have a lower rental income then they say we do. Does anyone have any experience with a property tax review hearing?
Thanks.

September 16, 2009

Co-op taxes & escrow disclosure

We are a small self-managed co-op. We pay our property taxes through the bank that holds our mortgage. Our monthly payments have been quite steady for several years. We just received a notice--"Annual Escrow Disclosure Statement"-- stating that this month we have to make a large lump-sum payment, apparently to replenish our tax escrow account. And then going forward our regular monthly payments are also going up a bit.

I left a message with the bank--their voice mail said they were receiving "high call volume" as a result of the "new NYC escrow analysis." Can anyone shed some light on this? Does this mean our building's property taxes have just gone way up? Or that we somehow have to "prepay" more into the escrow account rather than spreading it out month by month? Do we have any recourse to contest an increase?

I've left a message with our accountant, but in the meantime thought I'd see if anyone here had any insights...

Thanks!!

September 15, 2009

Need New Accountant

I filed my taxes for 2008 in February of 2009 via e-file, only to find out in July that I am being audited by NYC. They didn't send a refund, just a request for more information. I sent them more information, and now they want even more (I filed an itemized return). I have been working with an accountant, but am beginning to think that maybe they're part of the problem. I'm just not liking their lack of attention to detail, and I really don't like the fact that I'm being taken through the ringer twice on this. My accountant is not inexpensive, and I have provided good documentation -- from the beginning. Anyone have an accountant they like? Please let me know. I'll probably see this situation through with the one I currently have, but when all is said and done, I think I will be taking my business elsewhere. Thanks in advance.

Not Fair & Need Sleep

I own a townhouse which has a 3 family C of O. from the buildings dept. The Dept. of Finance mistakenly has it listed as a 4 family for tax purposes making it a class 2 property. OK, so now I pay about $7400 a year in taxes. My neighbor next door whose building is an identical 3 family with similar market value according to the city, pays $4700. In addition, he has a transitional assessed value of approx 28,000 compared to my taxable value of around 55,000. Why? In addition , the interiors of his building is nicer and would probably sell for more.
With a guaranteed increase every year of 8 percent, I will get choked out of my building in a few years with an out of control tax bill and unfairly so since I am legally a 3 family.
Has anyone changed their status and not gotten punished by the city for opening up this can of worms. Will the city ever reduce their taxable value of a property when changing the class? Does anyone know a great property tax attorney?
Stuff like this keeps me up at night and I need to sleep!

September 3, 2009

abatements for individual owners

We closed on a coop last month. At the end of the closing the management company's closing agent gave us the following info from the NYC Dept of Finance re: tax reductions for individual owners: http://www.nyc.gov/html/dof/html/property/property_tax_reduc_individual.shtml. The site suggests that at least some of these benefits are available to coop owners regardless of income of age, and regardless of the coop's current tax abatement status. I went ahead and sent in the application figuring it wouldn't hurt to apply. Do any other coop owners have experience applying for these abatement programs? Did you see any kind of reduction in your maintenance from your management company, and if so how much? Thanks in advance for any guidance!

Forum: Taxes