Re: tax exempt status for HOAs
From: David L. Mandel (
Date: Thu, 30 Aug 2007 00:59:08 -0700 (PDT)
Aha! Here was your original mistake, perhaps. "Mutual benefit corporation" sounds like federal IRC 501(c)(4), which actually wouldn't qualify you for federal HOA status (IRC 528 taxation). But incorporation is a state act, so if you file with IRS as an HOA, they could never know. But the state would, based on your incorporation, which is probably what needs to be changed. You need some better tax advice/representation, I'd say. Good luck.
David in Sacramento again.

----- Original Message ----- From: "Ken Lewis" <kenlewisjr [at]>
To: "'Cohousing-L'" <cohousing-l [at]>
Sent: Tuesday, August 28, 2007 1:07 PM
Subject: Re: [C-L]_ tax exempt status for HOAs

Buzz wrote:

If the government of California deals with the issue
of nonprofit status in the same way as other states,
it will likely only recognize nonprofits that are
officially recognized by the IRS under section
501(c)(3) of the Internal Revenue Code.

California must deal with it differently. We are officially incorporated as
a "nonprofit mutual benefit corporation" under the law by the same name.
While we are a nonprofit corporation, being tax-exempt is a different
matter. One has to explicitly apply for tax-exempt status.

The encouraging thing is that homeowners' associations are listed as an
example of tax-exempt organizations in California. If we get it, this could
be helpful info for other groups.

Thanks for your reply.


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