Parking space

[NotEasy]

Client bought a condo last year as his primary residence. No problem there with the mortgage interest and property tax deduction.

But a few months after he bought the home, he purchased a parking space nearby (not in the same building, but in next block.). Is the mortgage interest and property tax that he pays for this parking space deductible?

Interesting scenario, isn't it?

[taxea]

Are you saying that the condo did not come with any parking? Is the space included in his mortgage? If not, you are saying that he has a separate mortgage for the parking space? If it actually is a mortgage then I would take the expenses but if it is a personal loan or other I would not, however, I would add the cost of the space to his condo basis.

[Larmil]

Client bought a condo last year as his primary residence. No problem there with the mortgage interest and property tax deduction.

But a few months after he bought the home, he purchased a parking space nearby (not in the same building, but in next block.). Is the mortgage interest and property tax that he pays for this parking space deductible?

Interesting scenario, isn't it?

I would say the real estate tax is deductible, but not the interest. The parking space would not qualify as a residence.

[gkaiseril]

I would say the real estate tax is deductible, but not the interest. The parking space would not qualify as a residence.

Have you considered the practices with regard to the treatment of attached lots and deeded residence parking spaces in the locality where this is occurring?

In older cities like New York, NY, Philadelphia, PA, Boston, MA, or Chicago, IL there are a large number of multi- housing units that were made prior to the advent to the automobile, or when most people had automobiles and were built without parking spaces for the tenants or owners. This was also before zoning rules required the providing one or more parking spaces for each residential unit. And because of the age of the buildings, the zoning rules in effect at the time the building was built and the cost to implement the new rules, these buildings are exempt from providing a parking space under the 'grandfather' exemption of the rule.

Some condo conversions may involve an attached lot with individually deeded parking spaces, but then only one row of parking spaces would truly be adjacent to the lot upon which the residential unit is located.Or there may a vacant lot nearby but not adjacent to the condo's lot and is used to provide off street parking for the condos.

As long as the deeded parking space is used by the owner(s) of the residence for his/her/their parking I would take both the mortgage and taxes on Schedule A.

Have you looked at state where there is a state credit or deduction for real estate taxes on the state income tax return handles this situation?

Illinois has a non-refundable credit for taxes paid on the principal residence, an attached lot, or a parking space associated with the residence. The credit does not require the modification of the deed for the residence to include the remote parking space.

When automobiles started to become available, many new automobile owners rented a space in a public garage up to a block or more away from their apartment with a yearly lease. And many of those public garages are still renting spaces on a yearly basis. In the downtown ares, some of the vacant buildings are being converted into parking garages with deeded parking for people who are now living downtown in older buildings converted into condominiums and can not provide in building parking.