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Post by buddysmom on Sept 4, 2018 18:43:48 GMT
I know this is a long shot and believe it or not, could not find an answer when I googled...
I own a condo that I rent out and we are having a special assessment for a long-needed new roof--about $4000.
So the $4000 is being paid to the condo association.
I saw it coming, so I'm ok with it--it's a 30 year old roof.
But--is this expensed (deduct $4000 the year it is paid) or depreciate the $4000 over 27.5 years?
(It appears) we own the interiors only (walls in).
Anyone have experience in this or any info?
Thanks!
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Post by lemondrop on Sept 4, 2018 18:48:10 GMT
I am not a CPA but I would say logically that it is an expense in the year in which it is paid. You do not own the roof, the HOA does. The HOA should have reserves to pay for such capital expenses that your monthly assessments contributes to.
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Post by MichyM on Sept 4, 2018 19:02:30 GMT
I'm confused as to why a special assessment would be tax deductible at ALL while monthly HOA dues are not. The money goes to the same thing (keeping up the building). They're just collected differently. Can you help me understand this?
ETA: never mind. I just googled and I see the key to the dues being deductible is that the unit is a rental.
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mimima
Drama Llama
Stay Gold, Ponyboy
Posts: 5,213 
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Post by mimima on Sept 4, 2018 19:04:26 GMT
I'm confused as to why a special assessment would be tax deductible at ALL while monthly HOA dues are not. The money goes to the same thing (keeping up the building). They're just collected differently. Can you help me understand this? It's a rental and this assessment, and other HOA dues, are considered rental expenses, I suspect. |
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snyder
Pearl Clutcher
Posts: 4,493
Location: Colorado
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Post by snyder on Sept 4, 2018 19:13:33 GMT
I'm confused as to why a special assessment would be tax deductible at ALL while monthly HOA dues are not. The money goes to the same thing (keeping up the building). They're just collected differently. Can you help me understand this? ETA: never mind. I just googled and I see the key to the dues being deductible is that the unit is a rental. If you own it and live in it, you can't take those deductions, however as a rental, she can take the HOA and the cost of the roof off as expenses. |
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Post by buddysmom on Sept 4, 2018 19:42:46 GMT
I am not a CPA but I would say logically that it is an expense in the year in which it is paid. You do not own the roof, the HOA does. The HOA should have reserves to pay for such capital expenses that your monthly assessments contributes to. That's what I am thinking to expense it(and I like the answer lol) And yeah, that's a whole 'nother story about having no money in the reserves... |
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Deleted
Posts: 0
Aug 18, 2025 21:11:25 GMT
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Post by Deleted on Sept 4, 2018 19:51:20 GMT
I would say 27.5 years. It's not eligible for Section 179 depreciation.
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Post by Darcy Collins on Sept 4, 2018 22:27:01 GMT
It’s treated as a capital improvement and needs to be depreciated: “A condominium is most often a dwelling unit in a multi-unit building, but can also take other forms, such as a townhouse or garden apartment. If you own a condominium, you also own a share of the common elements, such as land, lobbies, elevators, and service areas. You and the other condominium owners may pay dues or assessments to a special corporation that is organized to take care of the common elements. Special rules apply if you rent your condominium to others. You can deduct as rental expenses all the expenses discussed in chapters 1 and 2. In addition, you can deduct any dues or assessments paid for maintenance of the common elements.” You can’t deduct special assessments you pay to a condominium management corporation for improvements. However, you may be able to recover your share of the cost of any improvement by taking depreciation.” www.irs.gov/publications/p527#en_US_2017_publink1000219144 |
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