Cohousing-L Mailing List: Gifts & Bequests - Tax Implications

[David Mandel (dlmandel]

I would be hard pressed to call a gift or bequest an "assessment." That
would really need to apply to all owners, or at least a rationally defined
portion of them.
But I know that gifts and bequests are not taxable to recipients when it
comes to individual income taxes, so I think the same principle would apply
to HOAs, even though the examples of exempt income in the instructions for
IRS 1140h don't say one way or the other. A quick online search didn't
reveal anything relevant, which I imagine it would have if I were wrong. So
I'm relatively confident in this opinion, but if I'm wrong and you sue me
I'll deny everything.
David Mandel, amateur tax return preparer for Southside Park Cohousing in
Sacramento.

>
> Date: Fri, 10 Feb 2023 13:06:42 -0500
> From: Diana Carroll <dianaecarroll [at] gmail.com>
> To: cohousing-l [at] cohousing.org
> Subject: Re: [C-L]_ Gifts & Bequests - Tax Implications
> Message-ID:
>         <CAAJBS=9sr8_DWQY=
> YqAGmvXLd6BUKKEqdq+Kg8y-4ayFW_eS7g [at] mail.gmail.com>
> Content-Type: text/plain; charset="UTF-8"
>
> I'm the treasurer at Mosaic Commons in Central MA. I haven't had this exact
> situation, but we have had discussions about it and it is likely to happen,
> so I've been thinking about it for a while.
>
> I think that given that the contribution is from an owner/member, and is
> for the purpose of maintaining or improving a common building, that it
> could be considered an assessment (a voluntary assessment, something the
> tax law appears not to contemplate) and therefore be exempt function
> income.
>
> Also, even more importantly, the gift is not in the main category excluded
> from being exempt function income: the owner in question is not receiving a
> service for their contribution (right?). The amount is clearly in support
> of your HOA's exempt functions. That's my take.
>
> Assuming you use for 1140h, here's the relevant bit:
>
> Exempt function income.
>
>
> Exempt function income consists of membership dues, fees, or assessments
> from
> (a) owners of condominium housing units; (b) owners of real property in the
> case of a residential real estate management association; or (c) owners of
> timeshare rights to use, or timeshare ownership interests in, real property
> in the case of a timeshare association. This income must come from the
> members as owners, not as customers, of the association's services.
>
> Assessments or fees for a common activity qualify but charges for providing
> services don?t qualify.
>
> Examples.
>
> In general, exempt function income includes assessments made to:
>
>    1.
>
>    Pay principal, interest, and real estate taxes on association property;
>    2.
>
>    Maintain association property; and
>    3.
>
>    Clear snow from public areas and remove trash.
>
> Income that is not exempt function income includes:
>
>    1.
>
>    Amounts that are not includible in the organization's gross income other
>    than under section 528 (for example, tax-exempt interest);
>    2.
>
>    Payments from nonmembers;
>    3.
>
>    Payments from members for special use of the organization's facilities,
>    apart from the use generally available to all members;
>    4.
>
>    Interest on amounts in a sinking fund;
>    5.
>
>    Payments for work done on nonassociation property; and
>    6.
>
>    Members' payments for transportation.
>
>
> On Fri, Feb 10, 2023 at 7:01 AM Mary Kay Doyle <marykaydoyle [at] gmail.com>
> wrote:
>
> > This is for all the financiers out there. I am the treasurer for a small
> > (18
> > homes) cohousing POA in rural North Carolina. We received a generous cash
> > gift ($2,500) from a member for the designated purpose of rehabilitating
> > one
> > of our common buildings. There are also several members who have decided
> to
> > include bequests to Elderberry in their wills, both cash and property.
> >
> >
> >
> > Has anyone received a property bequest or any sizable (>$1,000) cash
> gift?
> > How did your treasurer/accountant handle it?  Did you have to pay taxes
> on
> > it? Does the IRS consider property and/or cash gifts taxable income? I am
> > getting conflicting information in my research.
> >
> >
> >
> > Thanks in advance for sharing your experience!
> >
> >
> >
> > Mary Kay Doyle
> >
> > Elderberry Village POA
> >
> > Rougemont, NC
> >
> > https://www.elderberrycohousing.com/
> >
> >
> >
> >
> >
> >
> >
> > _________________________________________________________________
> > Cohousing-L mailing list -- Unsubscribe, archives and other info at:
> > http://L.cohousing.org/info
> >
> >
> >
> >
>
>
> ------------------------------
>
> Message: 4
> Date: Fri, 10 Feb 2023 14:11:50 -0800
> From: Neil Planchon <neil [at] swansway.com>
> To: cohousing-l [at] cohousing.org
> Subject: [C-L]_ 2 homes for sale at Swan's Market Cohousing in
>         Oakland!
> Message-ID: <234E2D83-FF7F-4244-9A2B-ACBC2FCCA5E5 [at] swansway.com>
> Content-Type: text/plain;       charset=utf-8
>
> Hello virtual neighbors,
>
> I hope this finds you and yours well. I want to let you know that two of
> our homes at Swan's Market Cohousing are on the market.
>
> Unit L
> https://www.ic.org/advert/live-in-historic-swans-market-cohousing/
> (Charmian)
>
> Unit V
> https://www.swansway.com/unit-v-for-sale/ (Sami and Benjamin)
>
> Please pass along to those you know are interested. And if you/your
> community has a mailing list, please make mention of this rare opportunity.
> Thank you!
>
> Cordially,
> Neil
> Steering Committee. Cohousing Research Network (CRN)
> Events Team Volunteer. Cohousing Association (Coho/US)
> Co-Developer and Co-Founder. Swan?s Market Cohousing, Oakland CA
>
> Head of Ads, Development, Help Desk and Partnerships
> Foundation for Intentional Community (FIC) neil [at] ic.org
> Click / Tap here >> https://www.ic.org/together-we-can/
>
> ------------------------------
>
> Message: 5
> Date: Fri, 10 Feb 2023 16:34:42 -0800
> From: Neil Planchon <neil [at] swansway.com>
> To: cohousing-l [at] cohousing.org
> Subject: [C-L]_ Invitation to present about your community at FIC's
>         Virtual Tour of Communities (almost monthly) event.
> Message-ID: <4F97C11C-4D38-4379-8187-09EBCE7111B4 [at] swansway.com>
> Content-Type: text/plain;       charset=utf-8
>
> Hello everyone,
>
> On behalf of the Foundation for Intentional Community (FIC) and Cynthia, I
> would like to pass on her invitation to my cohousing circle to present
> during the Virtual Tour of Communities event.
>
> Each month FIC invite three different communities to give 10-minute
> presentations about their project and answer questions from a live
> audience. I am doing all I can to have a cohousing community included as
> often as possible. ?
>
> No matter if your community is just starting or has been going strong for
> decades, let?s showcase the variety of communities within the movement. As
> an event presenter, you?ll get exposure to our audience of community
> enthusiasts from around the world, including:
>
>     ? 40k newsletter subscribers
>     ? 20k social media followers
>
> Afterwards, you?ll have a recording of the event that you can also use for
> your own purposes. You can watch the recordings of previous events to learn
> what it?s like here
> https://www.youtube.com/playlist?list=PLETYpdPgdO4mj5k3EBA-MSTnwdaPmm36i
>
>
> Sign up here if you?d like to present:
> https://www.ic.org/virtual-tour-presenter-form/. Please email Cynthia
> Tina, the Virtual Tour of Communities host at cynthia [at] ic.org with any
> questions.
>
> Cordially,
> Neil
>
> Steering Committee. Cohousing Research Network (CRN)
> Events Team Volunteer. Cohousing Association (Coho/US)
> Co-Developer and Co-Founder. Swan?s Market Cohousing, Oakland CA
>
> Head of Ads, Development, Help Desk and Partnerships
> Foundation for Intentional Community (FIC) neil [at] ic.org
> Click/Tap here to make a donation: https://www.ic.org/together-we-can/
>
>
>
>
>
> ------------------------------
>
> Message: 6
> Date: Fri, 10 Feb 2023 21:06:03 -0500
> From: Joel Bartlett <altairecovillage [at] gmail.com>
> To: cohousing-l [at] cohousing.org
> Subject: Re: [C-L]_ Invitation to present about your community at
>         FIC's Virtual Tour of Communities (almost monthly) event.
> Message-ID:
>         <CAEL1oeffCEArjk9kK4B7c-Ps=Xqoamcqho-uKA2=
> DpefRy59Tg [at] mail.gmail.com>
> Content-Type: text/plain; charset="UTF-8"
>
> Neil,  Thanks for this.  One issue with registering, however - when you go
> to state your preference of dates to present, the first auto-calendar
> works, but it is not possible to register your second or third choice.
> Just a computer glitch.
>
> Yours, Joel
>
> On Fri, Feb 10, 2023 at 7:35 PM Neil Planchon <neil [at] swansway.com> wrote:
>
> > Hello everyone,
> >
> > On behalf of the Foundation for Intentional Community (FIC) and Cynthia,
> I
> > would like to pass on her invitation to my cohousing circle to present
> > during the Virtual Tour of Communities event.
> >
> > Each month FIC invite three different communities to give 10-minute
> > presentations about their project and answer questions from a live
> > audience. I am doing all I can to have a cohousing community included as
> > often as possible. ?
> >
> > No matter if your community is just starting or has been going strong for
> > decades, let?s showcase the variety of communities within the movement.
> As
> > an event presenter, you?ll get exposure to our audience of community
> > enthusiasts from around the world, including:
> >
> >     ? 40k newsletter subscribers
> >     ? 20k social media followers
> >
> > Afterwards, you?ll have a recording of the event that you can also use
> for
> > your own purposes. You can watch the recordings of previous events to
> learn
> > what it?s like here
> > https://www.youtube.com/playlist?list=PLETYpdPgdO4mj5k3EBA-MSTnwdaPmm36i
> >
> >
> > Sign up here if you?d like to present:
> > https://www.ic.org/virtual-tour-presenter-form/. Please email Cynthia
> > Tina, the Virtual Tour of Communities host at cynthia [at] ic.org with any
> > questions.
> >
> > Cordially,
> > Neil
> >
> > Steering Committee. Cohousing Research Network (CRN)
> > Events Team Volunteer. Cohousing Association (Coho/US)
> > Co-Developer and Co-Founder. Swan?s Market Cohousing, Oakland CA
> >
> > Head of Ads, Development, Help Desk and Partnerships
> > Foundation for Intentional Community (FIC) neil [at] ic.org
> > Click/Tap here to make a donation: https://www.ic.org/together-we-can/
> >
> >
> >
> > _________________________________________________________________
> > Cohousing-L mailing list -- Unsubscribe, archives and other info at:
> > http://L.cohousing.org/info
> >
> >
> >
> >
>
>
> ------------------------------
>
> Message: 7
> Date: Fri, 10 Feb 2023 20:59:23 -0600
> From: Max Tite <maxtite [at] gmail.com>
> To: cohousing-l [at] cohousing.org
> Subject: [C-L]_ Cohousing apartment available in Minnesota!
> Message-ID:
>         <
> CAPxYcdt2BO+QQytoYfQmHu8zR359N6BZWLj+dpyOsLkicPpOSQ [at] mail.gmail.com>
> Content-Type: text/plain; charset="UTF-8"
>
> Monterey Cohousing Community has a very nice 1-bedroom unit coming
> available this Spring! Contact me directly and/or
> membership [at] montereycohousing.com if you would like more info. Here's a
> link
> to details on this rare opportunity!
> <
> https://drive.google.com/file/d/1_6G9ZVMfTECh7X1MWr5GjMWz79xTXOWd/view?usp=share_link
> >
> Max Tite, Monterey Cohousing
> ph/txt (626) 629-8483
>
>
> ------------------------------
>
> Subject: Digest Footer
>
> _________________________________________________________________
> Cohousing-L mailing list -- Unsubscribe, archives and other info at:
> http://L.cohousing.org/info
>
>
> ------------------------------
>
> End of Cohousing-L Digest, Vol 229, Issue 10
> ********************************************
>