Re: Meal Preparation
From: Rosemary McNaughton (astromezzogmail.com)
Date: Sun, 7 Feb 2010 06:15:12 -0800 (PST)
I'd like to know the same.  Our community has been perplexed by how to
handle functions that aren't related to the condominium association
function (property maintenance).  Meals, childcare, affordability
fund, community life, the garden, car-sharing, raising chickens...  If
you are filing the 1120-H tax form, there are strict limits on how
much of your income and expenditures can be non-function-related.  We
had to spin off meals from the condo association when we realized
that, and it's just run with a personal bank account right now.  I'd
done a search on the archives here and found that one community at
least had formed a sub-corporation for the common meals.

If you're filing the plain 1120, as we do, I'm not as clear on what
the restrictions are, but I've been wondering if it would be more
appropriate to set up a separate entity to encompass the
non-property-maintenance activities of our community.  We may end up
seeking legal and tax advice on this, but I'd love to hear what other
communities have done.  I believe in our state LLCs must pay a
$500/year filing fee, which would overwhelm the pretty small budgets
we're talking about here.

Another issue that concerns me is insurance restrictions and health
codes - if we set up something formal for meals, do we have to be
inspected by the city?  Do our childcare providers need to be
licensed?  If we charge for people to stay in our CH guest room do we
need a lodging license?  Seems like a lot of big questions to worry
about for very small operations, but I admit it's been paralyzing -
the amount of money we're talking about is so small that it doesn't
seem to make sense to pay to get everything done perfectly and
legally, but we also don't want to mess around with something that
would put our condo operations at risk.

-Rosemary McNaughton
Rocky Hill Cohousing
Florence, MA

On Tue, Jan 26, 2010 at 12:38 PM, Diana E Carroll
<dianaecarroll [at] gmail.com> wrote:
>
> Speaking from a banking perspective...what is the legal entity that owns
> the bank account?  did you set up an LLC or does an individual own it or
> what?  Thanks.
>
> We've had a few things we'd like to handle as financially separate
> systems but couldn't figure out how to do it without registering the
> "club" as an LLC.
>
> - Diana
>
> On 1/26/2010 12:30 PM, Lynn Nadeau / Maraiah wrote:
>> Someone just asked for insights about "splitting off" aspects of the
>> meal system from the whole community operation. We do that with the
>> accounting part: Separate books, and separate bank accounts, are kept
>> for the weekly cooked meals. The account holds both the kitty for
>> pantry supplies and the escrow money people have pre-paid for future
>> meals. Dinner fees are paid into it; cooks are reimbursed from it;
>> checks are written from it for pantry supplies.
>>
>> Ways it's not split: Our Common House Operations team supervises the
>> systems for meals, does most of the pantry shopping, and maintains the
>> accounting. Also, community annual assessments have included a couple
>> of vegetable-garden "shares" so that any Monday-night cook can use our
>> garden produce.
>>
>> Maraiah Lynn Nadeau, RoseWind Cohousing, Port Townsend WA
>> www.rosewind.org
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>
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