"Ray" <rayj.balt[at]verizonDELETHIS.net> wrote:
- quote -

You mean the home owner exclusion? I don't see why not,
though it might depend on exactly how the coop was set up.
You've got one version of condominiums, which are often set
up as nonprofit corporations, and the individual owners get
the exemption when they sell.

Stu

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You want to sell your primary residence for $500,000 which
is a tax-free gain if you are married and file MFJ. But
there is a problem with the liquidation of the coop's
not-for-profit corporation being hit with a 30% transfer
tax.

At first impression, my suggestion is don't sell the coop's
corp. Sell your units individually to the buyer. You avoid
the 30% tax and the new owner liquidates the corporation.
I like this cause it's simple.

Better idea! There must be a real estate attorney OR a
CPA or an Enrolled Agent in your area who understands these
corporations. Hell, Ed Zollars knows everything except
constructive receipt, but he lives in Arizona.

Dick

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Thanks Stuart -- I will follow that suggestion.

But what I'm more concerned about is whether we can avoid
the tax altogether.

-- Ray

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"Ray" <rayj.balt[at]verizonDELETHIS.net> wrote:

- quote -

Do you live in a state that imposes a real estate transfer
tax? Here in California the amount of the tax imposed is
notated on the recorded deed. If you go back to look at the
last deed you can see the amount of tax, and calculate
backward the price that was paid for it.

Stu

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Our six-unit coop was established in 1922 as a nonprofit
housing corporation. Each year we file a 1120H tax return,
and always income is offset by expenses.

We are considering selling the building for $3 million and
dividing the proceeds equally among the six shareholders.

We have no records indicating the basis of the building, but
undoubtedly this would be only a fraction of $3 million.
Establishing a basis, taking into account improvements,
could be very difficult.

My reading of the tax law is that the corporation would have
to pay 30 percent on the capital gain before distribution.

Is that reading correct? Is there any way out of that trap?

==========
Moderator:
So do not sell the coop. Sell the individual units for
$500K each and let the buyer close the coop's corporation.

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