Ridgeside Co-op

Home-Owner Tax Advantages

An important financial component of Ridge Side Co-op’s operation is that the co-op passes along to its members some of the same types of tax advantages enjoyed by an owner of a private home. The U.S. Internal Revenue Service allows members in co-ops such as Ridge Side Co-op to deduct on their personal income taxes their apartment’s share of the total mortgage interest and the property taxes paid by the co-op. At the end of each year the co-op’s treasurer determines the dollar amount to be allocated to each unit for tax purposes using the same "proportionate factor," a formula based upon the square footage contained within each of the apartments. This same “proportionate factor is used to calculate the monthly carrying charges to be paid by each of the nine units in the co-op after the co-op’s annual budget has been set each year. Additionally, due to the structure of cooperatives, there is considerably less personal financial risk to each member in a housing co-op, compared to someone who owns a share in a condominium association.