Re: Two Budgets?
From: Diana Carroll (dianaecarrollgmail.com)
Date: Mon, 30 Dec 2019 09:07:38 -0800 (PST)
You can file taxes as a homeowners association (1120H) , and therefore
assessments are untaxed, which in most cases is better than filing as a
business (1120). Your bookkeeper or accountant is no doubt already doing
this. 😊

What Dick is referring to is that in order to file as an HOA, certain
thresholds must be met regarding the percentage of income received as
assessments and amount spent on common expenses.

We’ve never had trouble meeting the thresholds. We have two separate
budgets for our HOA and cohousing community for our convenience but that
doesn’t matter for the IRS. They don’t care what “budget” you spend
against. Budgets are a business tool unrelated to taxes. So we count all
the income for both “community” and “hoa “ as income and all expenses
related to community and HOA as exempt. (We consulted a tax attorney to
make sure this worked.)

If you want to see more detail on how we do it, contact me offlist.

Diana
Bookkeeper and fake tax preparer for Mosaic Common

On Mon, Dec 30, 2019 at 11:25 AM David Heimann <heimann [at] theworld.com> 
wrote:

>
> Hi Dick,
>
>         I'm not aware of the IRS special treatment for condos that you
> mention, and live in a condo myself.  Could you please let me know what
> that is?
>
> Thanks,
> David
>
> David Heimann
> Jamaica Plain Cohousing
> Welcome to the Roaring Twenties!
>
>
> > Date: Sun, 29 Dec 2019 20:37:27 -0700
> > From: "Richard L Kohlhaas" <rlkohl [at] earthlink.net>
> > To: cohousing-l [at] cohousing.org
> > Subject: [C-L]_ Two Budgets?
> > Message-ID: <5E0970F7.23132.CE5715F [at] rlkohl.earthlink.net>
> > Content-Type: text/plain; charset=US-ASCII
> >
> > At Casa Verde, in the beginning, we were advised to keep condominium-type
> > transactions separate from "community" expenses, such as the meal
> program,
> > child care for meetings, social events, etc.  The reason being that a
> > combined budget could make us ineligible for the special IRS tax
> treatment
> > for condominiums.
> >
> > We did so, and therefore have two budgets, two bank accounts, and two
> > treasurers. The condominium assessments range from $240 to $380/month,
> and
> > community dues are $7.50/adult/month.
> >
> > We are curious if any other cohousing communities do their finances this
> > way .
> >
> >
> >
> > -------------------------
> > Dick Kohlhaas
> > Member of Colorado Springs Cohousing Community at Casa Verde Commons
> > 34 households on 4 acres  1.5 miles from center of city.
> > www.casaverde.us
> >
> >
> >
> >
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  • Two Budgets? Richard L Kohlhaas, December 29 2019
    • Re: Two Budgets? David Heimann, December 30 2019
      • Re: Two Budgets? Diana Carroll, December 30 2019

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