Re: Cohousing communities and tax-exemption, 501c3
From: Ann Zabaldo (zabaldoearthlink.net)
Date: Fri, 12 Jun 2015 07:38:01 -0700 (PDT)
PS: just because an organization is a nonprofit does not make it tax-exempt. 
You have to apply for tax exempt status. So even if you are a nonprofit you 
still have to pay taxes. The two absolutes in life: taxes and death. 

Sent from my iPhone

> On Jun 12, 2015, at 8:27 AM, Diana Carroll <dianaecarroll [at] gmail.com> 
> wrote:
> 
> 
>> On Friday, June 12, 2015, Sharon Villines <sharon [at] sharonvillines.com> 
>> wrote:
>> 
>> 
>> The fear of taxes and the desire to avoid them is actually not a big
>> concern, however. As a condo, the income is offset by expenses so there is
>> little if any profit. Until your reserves are large enough to earn
>> significant earnings in interest, there will be little if any income to tax.
> 
> That depends.
> 
> Any income from a source other than dues (assessments) is taxable.  So, for
> instance, we have a usage fee for overnight stays in the guest room, and we
> request contributions when an outside group uses our common house for a
> function.  These are taxable at 30% on the HOA tax form (1040h?). For us
> that amounts to a few hundred a year in taxes...not enough to make a huge
> difference. But it might account for more some communities.
> 
> Being a qualified non profit also has the potential to benefit individuals
> in the community.  "Donations" would be tax deductible for the donated.  We
> don't really have donations, but I know some communities have fund raising
> efforts beyond assessments. Like, a community may request pledges from
> individual households to build, say, a playground or swimming pool. It
> would be hard to convince the IRS an HOA served a larger community good but
> if you could, then individual contributors would see a benefit.
> 
> Diana
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