The New York law that lets condominium owners pay propertytaxes up to 65 percent less than similarly priced single-family homes is under attack in Ossining. That’s where single-family homeowners want the town to adopt the homestead option, which would put condominiums on equal tax footing with single-family homes. At stake are millions of dollars in […]
GOP Tax Proposal a Nightmare for Co-ops and Condos (NY)
Republican lawmakers released a $1.51 trillion tax plan on Thursday that slashes corporate taxes, gives more modest tax relief to the middle class – and, as written, will hurt most owners of co-op and condo apartments in New York City. Legislators from high-tax states such as New York and New Jersey have already expressed strong […]
Are HOA Fees Tax Deductible?
If you have purchased a home or condo, you are likely paying a monthly fee to cover repairs and maintenance on the outside of your home or in common areas. You may be wondering whether this fee is tax deductible. The answer regarding whether or not your HOA fees are tax deductible varies depending on […]
HOA Taxes | What Tax Forms Are HOAs Required to File?
In the United States, there are more than 351,000 Homeowners Associations (HOAs). They represent about 40 million households, or 53% of the owner-occupied homes in the country. Said differently, if you own your own home, there’s a good chance that you’re part of an HOA. Given how widespread HOAs are, it’s surprising that most people […]
A Cautionary Tax Tale for Homeowner Associations
Imagine, if you will, that you are a board member of a homeowner association, where all common elements are owned by the association. One day your board discovers that all of the association’s common elements, including all of your privately owned streets, parking areas, green space, gardens, and other amenities are now owned by complete […]
Tax Reform and Community Associations
U.S. Congress has been talking about Tax Reform for several years and President Trump has now turned his focus to Tax Reform by asking Congress to deliver a plan. This week, CAI submitted comments to the Senate Finance Committee to consider as they discuss Tax Reform. Â Â Read the article………….
New Jersey Superior Court Holds Condominium Association Was Not Entitled to Redeem Tax Sale Certificate on Condominium
The Superior Court of New Jersey, Hudson County, Chancery Division-General Equity Part recently held that a condominium association’s attempt to redeem a tax sale certificate on a condominium on which it held a lien was not valid because it was neither a mortgagee nor the owner of the property. See JNH Funding Corp. v. Ayed […]
Paris Meadows, LLC v City of Kentwood: Objecting to the Taxation of Common Elements (MI)
In Michigan the question of whether the common elements of a condominium are taxable appears to be well-settled. In Paris Meadows, LLC v City of Kentwood, 287 Mich App 136; 783 NW2d 133 (2010), the Michigan Court of Appeals held that pursuant to Section 131 of the Michigan Condominium Act, MCL 559.231, property taxes may […]
Taxes and Your HOA Community – To File or Not
If you live in a planned community, there is a good chance questions have come up about taxes and if your community needs to file them. We’ve heard many people admit that they didn’t realize their community needed to file tax returns. Even though it isn’t an uncommon problem for self-managed associations, depending on how […]
IRS Revenue Ruling 70-604 and MCL 450.2541(2)(b): The Value of Expert Advice
Many individuals and corporations, including community associations, are currently preparing their tax returns. For associations with excess revenue this process most likely involves a determination of whether to exercise an election under IRS Revenue Ruling 70-604. A proper election under Revenue Ruling 70-604 can be used to reduce an association’s taxable income by deducting from […]
DO HOAS NEED TO FILE A TAX RETURN?
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 following the tax reporting requirements of the IRS. Some common questions our office receives are “Must our HOA file a tax return?” “What […]
What to Do When It’s Tax Time for Your Association
It’s that time of year again. Tax time. And your Not-For-Profit Organization is no exception. Not-For-Profit organizations are considered a business and therefore obligated to file taxes like any other corporation. You can contact a Certified Public Accountant (CPA) or do it yourself. The process is simple and takes a little time if you’ve kept […]
Can HOA Fees Be Claimed on Your Taxes?
Tax season is here and we all want to deduct every last penny we can find. If you’re a member of a homeowners association, have you ever considered whether or not the HOA fees you pay are tax deductible? Every HOA is different, so you’ll want to find out what applies to your specific Association. […]
It’s Tax Time for Your Association
As evidenced by the increase in advertisements from H&R Block, Turbo Tax and your friendly, local accountant, it’s clear that we have entered “refund season” – AKA time to file your personal taxes.  But, don’t forget that it’s also tax time for your association.  Your community association is considered a business, and, while you […]
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 at approximately $21million negotiated with the county assessor to reduce the taxable value by sixty […]
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 tax related to their utilities as long as a few requirements are met—a fact of […]
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 the master deed. Carola dealt with a situation in which common element garages were created […]
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 misinterpreted the law by upholding the City’s taxation of the Association’s open space.   Read the […]
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 deduction for HOA assessments. If you live in an HOA or similar community, you should […]
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 that their condominium or homeowners’ association is also required to file federal income taxes on […]
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. Â Â Read the article……….
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. Â Â Read the article…………
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 profit.  Read the article…………
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 professional for details but below is a brief summary of California HOA tax return deadlines. […]
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 use such proceeds to cover construction costs, if not properly planned and managed, developers may […]
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 tax forms – Form 1120 or Form 1120-H. Form 1120-H is a short, simple, one-page […]
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……….
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 addition, Shea was held to its promise by state and municipal law, which required the […]
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 of the community association. While this case is based on interpretation of Nevada law, it […]
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 provider of HOA management services that offers tax assessment services and file the right tax […]
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 resulting from the lowered tax rate, all service transactions would have been taxable unless specifically […]
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 fact that the association’s income is only the maintenance fees collected from the members. The […]
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 tax exemption. Â Â Â Read more……..