Your question is better served through a process of DUE DILIGENCE involving a CPA versed in Co-op accounting and a counsel that is also well-versed on trusts as a form of ownership to a multifamily property.

Obviously, different forms of ownerships have advantages and disadvantages. Taxes are not just the only consideration to examine. I think ability to obtain financing for capital programs is a main consideration: a co-op has different financial recourses than condos to provide structural preservation, but what about trusts? Would banks extend the same financing to trusts as to co-ops and condos? Also, the structure of a trust and a co-op will have to be investigated by way as to how ownership into the trust is to be transferred.

Re your question:

"2) Are there really and tax advantages to not paying off the mortgage? - the apt has increased in value 8 times over what we paid for it - maybe the interest is now so low it makes sense to just pay it off?"


My educated guess would be:

You have time to make an appropriate DUE DILIGENCE STUDY, identify appropriate CPA and Attorney to ensure that your decision is the correct one for the current shareholders and those who will buy in the future into the new form of ownership. Rather than rushing into an UNKNOWN the study should satify the current shareholders whose decision will be needed for the conversion of ownership.

Some considerations:

1 A benefits analysis should provide the foundation to sell the idea to shareholders as (1) they will lose the benefit of deducting the underlying mortgage as small as it may be (2) they may have to be assessed to immediately gain a higher value to the unit (3) reserves to improve the property may have to be used to retire the debt and convert to new ownership.

2. An engineering study should be made of your property to know your future capital program and with this determine reserves that the new ownership form should assume.


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