I jut sold a condo in our HOA. Someone told me that 20% of the monthly condo fees
over the 9 yrs of ownership could be considered "capital improvements" and thus
increase my cost basis in the condo for tax purposes.
The rationale behind her (past president of
the condo board) advice was that 20% of the monthly condo fees was placed in a reserve fund
for capital expenditures. My argument was that some of the expenditures possibly
were for "maintenance" or repair of common elements that need such repair over
time. She seems to be very certain that I could use the figure as a capital
improvement/assessment.
I should add that over the past 6 years the condo association reserve fund
had been depleted and thus the unit owners were assessed 5/6 times for a total of
$50,000 for roof replacement, replacement of the finishing of the building, garage roof,
etc. Could you enlighten me, please. Thank you
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