Important Information Regarding Form TC201

Editor’s Note: Society member Abraham E. Haspel, along with technical subcommittee members of the NYSSCPA Real Estate Committee, including Larry Nalitt, Daniel Rosenberg, Don Kiamie, Elliot Lesser, Fess Wofse, Joe Kuttamperor, Roy Beckerman, Robert Reitman and Scott Lanzalaco, on behalf of the Society recently asked the New York City Tax Commission to clarify instructions to Form TC201. The following is the response by the tax commission, dated Jan. 31.

Dear Mr. Haspel:

In response to the inquiry by the New York State Society of Certified Public Accountants for guidance on completion of Parts 6 through 9 of Tax Commission Form TC201, the following will be included in an addendum to the instructions for Form TC201 that will be distributed shortly for use in 2003:

In reporting rental income in Part 6, where the accrual basis is employed, and the reporting entity’s leases provide scheduled increases in rent, do not straight-line rental income as may be required by Financial Accounting Standard No. 13.

In reporting expenses, the amortized costs of common area improvements having a useful life of more than one year may be included as miscellaneous expenses on line L in Part 7 if you itemize these amortized costs in Part 9 and the amount is amortized over the useful life of the item. Common area improvements include replacements of existing building components, major repairs, and installation of safety and health systems. Examples of replacement costs are replacements of boilers, roofs, elevators, and residential kitchen appliances and cabinets. Examples of safety and health systems are brick pointing, fire safety systems, and environmental remediation.

Your assistance in disseminating this addendum to accounting professionals working on filings at the Tax Commission will be greatly appreciated.

Very truly yours,

Reed Schneider
General Counsel, New York City Tax Commission