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I drew the short straw and got made the HOA treasurer. The HOA itself is tiny does not do much over the course of a year. (Just pay for some snow plowing, insurance and gardening.) The dues and the expenses just about match over the course of the year.

I know that it has to file a tax return of some flavor, but not much about it.

Any pointers to the IRS pubs that cover this? Going to a professional for the actual return is certainly a possibility, but I need to know some background.
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No. of Recommendations: 2
I drew the short straw and got made the HOA treasurer. The HOA itself is tiny does not do much over the course of a year. (Just pay for some snow plowing, insurance and gardening.) The dues and the expenses just about match over the course of the year.

I know that it has to file a tax return of some flavor, but not much about it.

Any pointers to the IRS pubs that cover this? Going to a professional for the actual return is certainly a possibility, but I need to know some background.

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Start with the instructions to Form 1120-H.
http://www.irs.gov/pub/irs-pdf/i1120h.pdf

A HOA is generally an exempt organization under Code Section 501(c)(7).
It is taxed only on its investment income (interest, dividends, etc.) at a rate of 30%. This may or may not be cheaper than filing as a regular corporation (filing and 1120) and treating all your dues, assessments, etc., as business income, if you're about breaking even.

You have the option to do either. And you can change your election every year. The instructions spell this out on pages 1-2.

Bill
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Have you asked for copies of the tax returns for the last few years?
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No. of Recommendations: 1
I drew the short straw and got made the HOA treasurer. The HOA itself is tiny does not do much over the course of a year. (Just pay for some snow plowing, insurance and gardening.) The dues and the expenses just about match over the course of the year.

I know that it has to file a tax return of some flavor, but not much about it.

Any pointers to the IRS pubs that cover this? Going to a professional for the actual return is certainly a possibility, but I need to know some background.


Congratulations on your selection, and more importantly, on having the foresight to ask for advice now and not when things get urgent. Most HOAs file Form 1120-H, US Income Tax Return for Homeowners Associations, though there are a few which qualify as 501(c)4 or 501(c)7 organizations and file a Form 990 series return. You can find information about this at the IRS website. There are also some professionals who provide advice to HOAs. I can't vouch for the quality of any of them.

Ira
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Thanks for the info. I haven't gotten the old returns yet. I will get them before the year ends. The reason I'm worrying about this now is I don't want to get a nasty surprise when it's time to do the return.

What's the scoop on unrealized capital gains? The HOA has the road repair sinking fund stashed in a mutual fund that I think has an unrealized capital gain.
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