Cohousing-L Mailing List: Re: CoHo Partnerships and taxes

[Rob Sandelin (robsan]

If I were concerned about tax liabilities and/ or ramifications of 
partnerships, etc. on taxes I would hire a local accountant/ tax 
specialist and get professional advice.  This is what we did at 
Sharingwood and it saved us from making several problems in the future. 
 We defined what we wanted to do and our tax accountant dug through the 
Fed tax laws and gave us excellent advise on how to set up our 
membership agreements and sales.  The bottom line was, we paid for 
professional advice and it was worth every penny.  You can wing it on 
taxes (we did for several years) and it may not be a big deal at all, 
however then again, a major goof could cost you plenty. We paid a 
couple hundred dollars in penalties and back taxes and are up to date.  
It could have been a lot worse, especially if we had actually collected 
money in pre-sales on units and not recorded those transactions correctly.

Be sure to keep impeccable records of all financial transactions on a 
leger or spreadsheet including all interest paid on any accounts, all 
monies collected with date, amount and from whom, and all monies paid, 
date, amount and to whom.  Our accountant said our record keeping was 
so good it saved us $200 in his time, and should we ever get audited, 
we are in good shape.

Keeping this sort of record is a big chore which is easy to neglect.

Rob Sandelin
Sharingwood