Cohousing-L Mailing List: Re: HOA taxes

[Diana E Carroll (dianaecarroll]

Sharon, the question isn't whether the cost is tax deductible.  The 
question is whether the cost falls into the 'acceptable expenses' that 
determine whether an HOA is allowed to filed the 1120-H form.  in order 
to be legally allowed to file that form, at least 90% of an 
association's expenses must be "to acquire, build, manage, maintain, or 
care for its property"

So what we are discussing aren't tax deductions but qualifying for a 
particular tax status.  So it's very helpful to talk with others about 
what does and doesn't qualify, especially this time of year as several 
of us are working on preparing our taxes.  The last thing any of us 
needs is trouble with the IRS that might result if we miscategorize our 
expenses and trigger an audit.

- Diana
with her Treasurer hat on


On 2/8/2010 9:43 AM, Sharon Villines wrote:
> On Feb 8, 2010, at 8:57 AM, Diana E Carroll wrote:
>
> > Meals I think would be hard to include.  :-\
>
> What about meetings following potlucks, like professional networking
> group do? Those expenses are all tax deductible. (Said almost in jest.)
>
> If you want to play the game of tax exemptions and the IRS, you can,
> in a million ways. Even have a team working on this like corporations
> and wealthy people do. As Warren Buffett says, his secretary pays
> more taxes than he does.
>
> But how much money do you save? Is it worth the distraction from the
> business of community? Are the taxes paid more than having a bake sale
> would cover? Can you make this a game? A community activity? An act of
> civil disobedience.
>
> Some would say that tax avoidance is in the same category as
> stewardship of community funds. Maybe it is. My concern is how much is
> it worth? What affect on your values does that focus have? How does it
> distort what the community priorities?
>
> Just something to think about during budgeting season when someone
> raises the 90% limitation to prevent HOA dues from being spent on
> something the IRS doesn't consider necessary. When does the tail start
> wagging the dog?
>
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
>
>
>
>
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