Beach condo owners prepare tax lawsuits (FL)

Hundreds of Pensacola Beach condominium owners plan to file tax lawsuits against the county before the end of November.  In the lawsuits, the condominium owners will challenge a decision by Escambia County Property Appraiser Chris Jones not to apply a

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‘Double-Taxed’ N.J. Condo Owners Pay 2 Different Towns

The owners of a New Jersey condominium may find themselves paying taxes to two towns at the same time under a recently issued court decision.  A New Jersey appellate court affirmed a trial court’s decision on Friday, ruling that owners

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Reductions in Property Value Due to the Presence of Construction Defects

Last month the Oregon Supreme Court recognized and seemingly affirmed a strategy to reduce taxable property value due to the existence of construction defects. In Oakmont, LLC v. Oregon Dept. of Revenue (2016), the owner of an apartment complex valued

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Your Homeowners’ Association May Not Be Taking Advantage of a Favorable Tax Break (FL)

A major expense for many homeowners’ and condominium owners’ associations is the cost of the utilities for common areas of the communities. The good news for such associations, however, is that they are entitled to an exemption for the sales

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MI Court of Appeals Rules That (County) Treasurer Cannot Foreclose on Common Elements

In Carola Condominium Association v Dustin Chappell, issued July 19, 2016 (Docket No. 325851) (Unpublished Opinion) the Michigan Court of Appeals held that the Wayne County Treasurer could not foreclose on common elements that were identified as “garage spaces” in

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Significant win in Supreme Court of Virginia for local association with statewide benefit

On June 1, 2016, the Supreme Court ruled on a case decided by a Suffolk Circuit Court Judge regarding the taxation of open space in a homeowners association. The Court unanimously overturned the Circuit Court ruling finding that the judge

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Tax relief for condo owners passes in Albany (NY)

State Sen. Tony Avella (D-Bayside) and state Assemblyman Edward Braunstein (D-Bayside) have announced the passage of a bill designed to expand access to the J-51 Tax Abatement for middle-class condo and co-op owners. The bill is a small step, compared

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TAX WATCH: Trump Tower (condo) garage deal skirts law (NY)

State law prohibits municipalities from separately taxing the common area of a condominium, which avoids double taxation on property owned by condo dwellers.  But, over the past eight years, owners at Trump Tower Condominium at City Center in White Plains

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What You Should Know About the “Home Act”

The HOME Act, or Helping Our Middle-Income Earners Act, was introduced by Representatives Eshoo and Thompson to the House of Representatives on March 3, 2016. It is designed to amend the Internal Revenue Code of 1986 to allow for a

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Court of Appeals sides with Landmark HOA (CO)

In a unanimous decision, three judges on the Colorado Court of Appeals have sided with the Landmark Homeowners Association over UMB Bank, N.A., Colorado Bondshares and Marin Metropolitan District.   Read the article……….

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Chicago-area condo associations see wisdom in HOME Act

Here’s another reason to stay current on assessment payments to your community association: You might get a tax break.  Recent proposed legislation would allow homeowners who earn $115,000 or less in annual income (or $150,000 on joint returns) to deduct

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Bill would grant tax deduction for homeowners association assessments

They are a giant presence in American real estate, but they get short shrift in the federal tax code: the estimated 340,000 communities across the country that are governed by homeowners associations and are often subject to a form of

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Taxes in Your Michigan Condominium or Homeowners’ Association: Is Your Association Current with the IRS?

As April 15th approaches, many Michigan residents are reviewing various sources of gross income, tax credits and tax deductions in order to prepare individual or joint income tax returns. In addition to personal income taxes, newer directors may be unaware

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Error costs Butler County (OH) condo owners thousands

A Hamilton condo community’s Home Owners Association says it is out almost $10,000 in legal fees due to a tax error by the county auditor and court proceeding delays.    Read the article………….

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Tax Tips For Associations

The vast majority of condominium and community associations are nonprofit corporations, but even they have to file taxes. There are some tips your community association should follow when it comes to tax time.   Read the article……….

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When do community associations need to vote to roll over surplus funds to the next fiscal year?

In order to avoid adverse tax consequences, community associations should consider conducting a vote to apply surplus funds in their operating budgets at the end of their fiscal year to the budgets for their next fiscal year.   Read the article…………

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Do HOAs Have To File Tax Returns?

A home owners association is considered a corporation by the Internal Revenue Service. Even if the association is organized as a non-profit, the IRS will treat it as a corporation. That means HOAs must file tax returns, including a state

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Florida Homeowner Associations and Federal Income Tax Considerations

HOAs have two options for purposes of federal income taxation: (i) an election under Section 528 of the Internal Revenue Code (IRC) or (ii) taxation as an ordinary corporation. HOAs are like any other corporation, even if they’re not for

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HOAs Must File Annual Tax Returns!

Especially with self-managed communities, there seems to be a lot of confusion (and questions) about community association taxes and tax returns. The answers are pretty simple. The bottom line is that community associations need to file federal and state (at

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Tax Dates to Add to Your Calendar

There’s no avoiding taxes, but knowing the various tax deadlines for your HOA can at least make the process a little easier because it prevents you from scrambling at the last minute. If you want to get ready for tax

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Important Tax Deadlines Your HOA Board Should Put on the Calendar

Your homeowners association has tax reporting and filing requirements it must adhere to. It can be difficult for an HOA board to understand what these are all on its own. It’s important that your HOA board contacts your Association’s accounting

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AK: $42,500 settlement OK’d by council in condominium case

In the long-running Ken Castner v. City of Homer case, the Homer City Council on Monday approved a $42,500 settlement with Castner and his attorney. The council met in executive session to consider a settlement offer from Castner’s attorney, Stephan

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For seniors, tax-free condo association fees unlikely (AK)

It is unlikely that the city will try to find a way to make condo association fees tax exempt for seniors, even though these fees often include utilities that would otherwise be considered tax free by the city, according to

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Berkeley HOA (WV) common areas are no longer taxed

Residents who live in a homeowners association in Berkeley County may notice an adjustment in their annual tax bill after the Berkeley County Assessor’s Office has stopped taxing most HOA common areas.  Beginning with the 2015 tax bill, HOAs are

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Westgate (RI) condo owners face taxes on units that aren’t there

James Simmons and his wife, Susan Gaipo, own a Westgate condominium, only, like 37 other units, it hasn’t been there since being destroyed by fire on March 11. The Simmonses pay a monthly $271.89 association fee for water, heat and

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How mandatory accounting methods impact South Florida condo developers

The South Florida condo market has experienced a boom in recent years, due in large part by the influx of foreign investors, many of whom are paying cash for their condos. While cash up front is ideal and developers can

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Foreclosure Crisis Fallout: HOA’s Owe Cities Money (FL)

The Crossings in Boynton Beach is home to hundreds of people and like so many other places, the housing crisis hit hard.  City officials say in 2010, the development had many homes in foreclosure and those homeowners stopped paying their

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HOA income-tax returns can be filed two ways

Q: My husband is on the board of our HOA, and for the past two years our manager has said we have to file tax returns for the HOA. Our only income is from the assessments, plus a few dollars

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Condominium and Homeowner Federal Tax Returns again Due

Tax season is here once again! As nonprofit corporations, every community association in Ohio is required to file an annual tax return with the Internal Revenue Service. However, associations have the ability to choose between the filing of two different

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City to comply with judge’s ruling, says decision doesn’t apply to all (AK)

On the day Kenai Superior Court Judge Charles Huguelet imposed a deadline for the city to respond to an order to show why it’s not in contempt of court regarding its assessment of condominiums in the Kachemak Bay Title Company

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Indiana Tax Court rejects property tax exemption for Homeowners’ Association that failed to show it was organized to retain and preserve lake property

A Hoosier Homeowners’ Association was denied a property tax exemption because it failed to show that it was established for the purpose of retaining and preserving its land and water for their natural characteristics.      Read more……….

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Yes, Community Associations and HOAs Need to File Tax Returns!

This is one of the first questions I ask when I meet with a new community association client to conduct an audit or other financial procedure. All too often the response is “No. Do we have to?”    Read more……..

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Tax Cases (And Rulings) Of 2014: A Big Break For Home Builders

This was more than just marketing chatter, however, as Shea invested significant funds – upwards of 30% of total budgeted costs, in some developments — in the amenities – such as pools, golf courses, and clubhouses –for each neighborhood. In

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Homeowner Association IRS Ruling Highlights Schizophrenic Nature Of Associations

Unless they have vast reserves earning significant investment income, homeowners associations can avoid any significant tax liability by filing Form 1120H, which allows the organization to exclude assessments.    Read more……..

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Court Ruling May Result in Property Tax on Previously Exempt Community Association Property (NV)

A recent Nevada Supreme Court decision suggests that community association common areas may be subject to property tax based upon the value of common area improvements, even if the underlying land is effectively valueless because it is encumbered by restrictions

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Does your community file the proper tax return?

Last week I was fortunate to sit in on a continuing education class provided by Donna Seidenberg and Steven Price of the Fuoco Group (www.fuoco.com), certified accountants and business advisors. The class focused on the issues pertaining to association tax

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Has Your Association Filed Taxes for 2014?

Did you know the IRS classifies your Homeowners Association (HOA) as a corporate entity, a classification that means your HOA has an unextended tax-return due date of March 15 for the calendar year? If not, it’s time to contact a

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HOA tax deadline approaching (WV)

If you own a home in a planned community or development, there is a good chance you are a member of a homeowners’ association (HOA). One perplexing aspect of HOA management is the tax reporting requirements of the IRS.  

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Time for IRS Form 1120 Filers to Make the Revenue Ruling 70-604 Election

If your association files Form 1120 for its federal tax return, as opposed to Form 1120-H, do not forget to make your annual Revenue Ruling 70-604 election. It is most effective to make this election at the annual meeting. Revenue

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Clark County (NV) assessor responds to article about taxes on HOA homes

Last week, I received a telephone call from Clark County Assessor Michele Michelle Shafe, in response to my article pertaining to taxes on association homes. She asked me to correct one error that I made in the article.    

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HOA and Community Association Tax Returns – Think you don’t need to file an annual tax return? Think again!

When meeting with a community association client (homeowner association, condo association, etc.), one of the first questions I ask is whether they’ve filed a tax return this year. Too often, the answer is no. Unfortunately, that’s the wrong answer. I

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Ohio Community Associations Dodge a Sales Tax Bullet

On February 12, 2013, a new budget and tax reform plan known as House Bill 59 was introduced. Under the proposal, Ohio’s sales tax rate would have been lowered from 5.5% to 5%. To make up for the lost revenue

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The Tax Man Cometh for Associations Too!

Each of us is undoubtedly thinking about our own personal tax returns with April 15th upon us. However, board members have to think about tax time twice: personally and on behalf of the association. Hopefully, every association has retained an

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Community Association Insurance: Losses, Deductibles, Funding Deductibles,

This short briefing paper is only meant to set forth certain key issues  involving community association insurance losses, deductibles, reserves and federal tax  implications.  This paper is not meant to provide tax or legal advice about such matters.   Read More……PDF

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Toeing The IRS Line In Homeowner Associations

In 1995, the IRS issued a Tax Advice Memorandum relating to the audit of a Florida time-share association. In this Memorandum, the IRS drew parallels between time share and homeowner associations relating to filing tax form 1120       Read

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Tax-exempt, or Not-for-profit?

We are frequently asked, “If we are a not-for-profit corporation, why do we still have to pay taxes?” Tax exempt and not-for-profit are two completely different concepts in the world of community associations. The notion of being not-for-profit stems from the

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501(c)(4) Tax Exempt Homeowners Associations

This site provides information regarding tax exempt homeowners associations. We hope that you will find the information on this site helpful in understanding the differences between the various Internal Revenue Code (IRC) Sections under which an association may qualify for

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