Preview
FILED: QUEENS COUNTY CLERK 08/31/2022 02:36 PM INDEX NO. 707601/2020
NYSCEF DOC. NO. 118 RECEIVED NYSCEF: 08/31/2022
Exhibit H
FILED: QUEENS COUNTY CLERK 08/31/2022 02:36 PM INDEX NO. 707601/2020
NYSCEF § 216. Deduction
DOC. NO. 118 of taxes, interest, and business depreciation by..., 26 USCA § 216 RECEIVED NYSCEF: 08/31/2022
United States Code Annotated
Title 26. Internal Revenue Code (Refs & Annos)
Subtitle A. Income Taxes (Refs & Annos)
Chapter 1. Normal Taxes and Surtaxes (Refs & Annos)
Subchapter B. Computation of Taxable Income
Part VII. Additional Itemized Deductions for Individuals (Refs & Annos)
26 U.S.C.A. § 216, I.R.C. § 216
§ 216. Deduction of taxes, interest, and business depreciation
by cooperative housing corporation tenant-stockholder
Effective: December 20, 2007
Currentness
(a) Allowance of deduction.--In the case of a tenant-stockholder (as defined in subsection (b)(2)), there shall be allowed as a
deduction amounts (not otherwise deductible) paid or accrued to a cooperative housing corporation within the taxable year, but
only to the extent that such amounts represent the tenant-stockholder's proportionate share of--
(1) the real estate taxes allowable as a deduction to the corporation under section 164 which are paid or incurred by the
corporation on the houses or apartment building and on the land on which such houses (or building) are situated, or
(2) the interest allowable as a deduction to the corporation under section 163 which is paid or incurred by the corporation
on its indebtedness contracted--
(A) in the acquisition, construction, alteration, rehabilitation, or maintenance of the houses or apartment building, or
(B) in the acquisition of the land on which the houses (or apartment building) are situated.
(b) Definitions.--For purposes of this section--
(1) Cooperative housing corporation.--The term “cooperative housing corporation” means a corporation--
(A) having one and only one class of stock outstanding,
(B) each of the stockholders of which is entitled, solely by reason of his ownership of stock in the corporation, to occupy
for dwelling purposes a house, or an apartment in a building, owned or leased by such corporation,
(C) no stockholder of which is entitled (either conditionally or unconditionally) to receive any distribution not out of
earnings and profits of the corporation except on a complete or partial liquidation of the corporation, and
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FILED: QUEENS COUNTY CLERK 08/31/2022 02:36 PM INDEX NO. 707601/2020
NYSCEF § 216. Deduction
DOC. NO. 118 of taxes, interest, and business depreciation by..., 26 USCA § 216 RECEIVED NYSCEF: 08/31/2022
(D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in
subsection (a) are paid or incurred:
(i) 80 percent or more of the corporation's gross income for such taxable year is derived from tenant-stockholders.
(ii) At all times during such taxable year, 80 percent or more of the total square footage of the corporation's property is
used or available for use by the tenant-stockholders for residential purposes or purposes ancillary to such residential use.
(iii) 90 percent or more of the expenditures of the corporation paid or incurred during such taxable year are paid or
incurred for the acquisition, construction, management, maintenance, or care of the corporation's property for the benefit
of the tenant-stockholders.
(2) Tenant-stockholder.--The term “tenant-stockholder” means a person who is a stockholder in a cooperative housing
corporation, and whose stock is fully paid-up in an amount not less than an amount shown to the satisfaction of the Secretary
as bearing a reasonable relationship to the portion of the value of the corporation's equity in the houses or apartment building
and the land on which situated which is attributable to the house or apartment which such person is entitled to occupy.
(3) Tenant-stockholder's proportionate share.--
(A) In general.--Except as provided in subparagraph (B), the term “tenant-stockholder's proportionate share” means
that proportion which the stock of the cooperative housing corporation owned by the tenant-stockholder is of the total
outstanding stock of the corporation (including any stock held by the corporation).
(B) Special rule where allocation of taxes or interest reflect cost to corporation of stockholder's unit.--
(i) In general.--If, for any taxable year--
(I) each dwelling unit owned or leased by a cooperative housing corporation is separately allocated a share of such
corporation's real estate taxes described in subsection (a)(1) or a share of such corporation's interest described in
subsection (a)(2), and
(II) such allocations reasonably reflect the cost to such corporation of such taxes, or of such interest, attributable to
the tenant-stockholder's dwelling unit (and such unit's share of the common areas),
then the term “tenant-stockholder's proportionate share” means the shares determined in accordance with the
allocations described in subclause (II).
(ii) Election by corporation required.--Clause (i) shall apply with respect to any cooperative housing corporation only
if such corporation elects its application. Such an election, once made, may be revoked only with the consent of the
Secretary.
© 2022 Thomson Reuters. No claim to original U.S. Government Works. 2
FILED: QUEENS COUNTY CLERK 08/31/2022 02:36 PM INDEX NO. 707601/2020
NYSCEF § 216. Deduction
DOC. NO. 118 of taxes, interest, and business depreciation by..., 26 USCA § 216 RECEIVED NYSCEF: 08/31/2022
(4) Stock owned by governmental units.--For purposes of this subsection, in determining whether a corporation is a
cooperative housing corporation, stock owned and apartments leased by the United States or any of its possessions, a State
or any political subdivision thereof, or any agency or instrumentality of the foregoing empowered to acquire shares in a
cooperative housing corporation for the purpose of providing housing facilities, shall not be taken into account.
(5) Prior approval of occupancy.--For purposes of this section, in the following cases there shall not be taken into account
the fact that (by agreement with the cooperative housing corporation) the person or his nominee may not occupy the house
or apartment without the prior approval of such corporation:
(A) In any case where a person acquires stock of a cooperative housing corporation by operation of law.
(B) In any case where a person other than an individual acquires stock of a cooperative housing corporation.
(C) In any case where the original seller acquires any stock of the cooperative housing corporation from the corporation
not later than 1 year after the date on which the apartments or houses (or leaseholds therein) are transferred by the original
seller to the corporation.
(6) Original seller defined.--For purposes of paragraph (5), the term “original seller” means the person from whom the
corporation has acquired the apartments or houses (or leaseholds therein).
(c) Treatment as property subject to depreciation.--
(1) In general.--So much of the stock of a tenant-stockholder in a cooperative housing corporation as is allocable, under
regulations prescribed by the Secretary, to a proprietary lease or right of tenancy in property subject to the allowance for
depreciation under section 167(a) shall, to the extent such proprietary lease or right of tenancy is used by such tenant-
stockholder in a trade or business or for the production of income, be treated as property subject to the allowance for
depreciation under section 167(a). The preceding sentence shall not be construed to limit or deny a deduction for depreciation
under section 167(a) by a cooperative housing corporation with respect to property owned by such a corporation and leased
to tenant-stockholders.
(2) Deduction limited to adjusted basis in stock.--
(A) In general.--The amount of any deduction for depreciation allowable under section 167(a) to a tenant-stockholder
with respect to any stock for any taxable year by reason of paragraph (1) shall not exceed the adjusted basis of such stock
as of the close of the taxable year of the tenant-stockholder in which such deduction was incurred.
(B) Carryforward of disallowed amount.--The amount of any deduction which is not allowed by reason of subparagraph
(A) shall, subject to the provisions of subparagraph (A), be treated as a deduction allowable under section 167(a) in the
succeeding taxable year.
© 2022 Thomson Reuters. No claim to original U.S. Government Works. 3
FILED: QUEENS COUNTY CLERK 08/31/2022 02:36 PM INDEX NO. 707601/2020
NYSCEF § 216. Deduction
DOC. NO. 118 of taxes, interest, and business depreciation by..., 26 USCA § 216 RECEIVED NYSCEF: 08/31/2022
(d) Disallowance of deduction for certain payments to the corporation.--No deduction shall be allowed to a stockholder in
a cooperative housing corporation for any amount paid or accrued to such corporation during any taxable year (in excess of the
stockholder's proportionate share of the items described in subsections (a)(1) and (a)(2)) to the extent that, under regulations
prescribed by the Secretary, such amount is properly allocable to amounts paid or incurred at any time by the corporation which
are chargeable to the corporation's capital account. The stockholder's adjusted basis in the stock in the corporation shall be
increased by the amount of such disallowance.
(e) Distributions by cooperative housing corporations.--Except as provided in regulations, no gain or loss shall be recognized
on the distributionby a cooperative housing corporation of a dwelling unit to a stockholder in such corporation ifsuch
distribution is in exchange for the stockholder's stock in such corporation and such dwelling unit is used as his principal residence
(within the meaning of section 121).
CREDIT(S)
(Aug. 16, 1954, c. 736, 68A Stat. 71; Pub.L. 87-834, § 28(a), Oct. 16, 1962, 76 Stat. 1068; Pub.L. 91-172, Title IX, § 913(a),
Dec. 30, 1969, 83 Stat. 723; Pub.L. 94-455, Title XIX, § 1906(b)(13)(A), Title XXI, § 2101(b), (f)(1), Oct. 4, 1976, 90 Stat.
1834, 1899; Pub.L. 95-600, Title V, § 531(a), Nov. 6, 1978, 92 Stat. 2886; Pub.L. 96-222, Title I, § 105(a)(6), Apr. 1, 1980, 94
Stat. 219; Pub.L. 99-514, Title VI, § 644(a) to (d), Oct. 22, 1986, 100 Stat. 2285, 2286; Pub.L. 100-647, Title VI, § 6282(a),
Nov. 10, 1988, 102 Stat. 3755; Pub.L. 101-508, Title XI, § 11702(i), Nov. 5, 1990, 104 Stat. 1388-516; Pub.L. 105-34, Title III,
§ 312(d)(4), Aug. 5, 1997, 111 Stat. 840; Pub.L. 110-142, § 4(a), Dec. 20, 2007, 121 Stat. 1804.)
Notes of Decisions (5)
26 U.S.C.A. § 216, 26 USCA § 216
Current through P.L. 117-164. Some statute sections may be more current, see credits for details.
End of Document © 2022 Thomson Reuters. No claim to original U.S. Government Works.
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