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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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Does an unincorporated homeowners association have to file ...

Customer Question

Does an unincorporated homeowners association have to file an income tax return, if so what? The Association collects a monthly common charge, and pays bills for the common area such as utilities, management fees, repairs and maintenance of common areas.
Submitted: 10 years ago.
Category: Tax
Expert:  Lev replied 10 years ago.

If your homeowner association has a status of tax-exempt organization - it must file an annual information return. Tax-exempt organizations that have annual gross receipts not normally in excess of $25,000 are not required to file the annual information return.

A homeowners association may elect to take advantage of the certain tax benefits provided by section 528 of the Internal Revenue Code by filing the form 1120H - U.S. Income Tax Return For Homeowners Associations as it's income tax return.

See instruction - page 2 - for further information on the tax benefits available under the election and for the requirements of the election.