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CO-OP REPORTING QUESTIONS

By Lawrence Prosky posted 06-28-2016 01:28 PM

  
I handle many co-ops.  In situations where I prepare the 1098 forms, I typically use Box 4 as a supplementary information box, and use the wording "RET" with a dollar amount to provide the shareholder's allocated real estate tax deduction.  I also put the shareholder's apartment number and number of stock shares owned in that box.  Again, just supplementary information to go along with Tax Letter.  I have done this for over 20 years.  I just learned that for tax year 2014, the IRS sent one of the shareholders a bill for unreported income, using the RET amount as income, treating the RET abbreviation as "return" of some kind.  Has anyone ever seen this or have any comment on how to handle?  I already provided a letter to co-op's managing agent with a general explanation that I suggested they pass along for use by impacted shareholders to send IRS.  Thanks.  Larry
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