Cohousing-L Mailing List: Re: Solar and tax breaks

[Sharon Villines (sharon]

> On Apr 17, 2026, at 5:57 PM, Diana Carroll via Cohousing-L <cohousing-l [at] 
> cohousing.org> wrote:

> Do they not invest their reserves? We file form 1120-H and other than
> a small $100 exclusion we pay 30% tax on investment income (interest in our
> case).

Newer communities don’t have large reserves, and in many recent years there 
were little to no earnings on savings anyway.

When Takoma Village asked the accountant this just after move-in, they said you 
have a long way to go before those earnings are large enough to be worth 
worrying about. 

The best way to take advantage of earnings on reserves is probably to spend the 
reserves on the facilities they were saved for. Takoma Village spent several 
hundred thousands of dollars replacing a roof and putting on solar panels. The 
expenditure for the roof was a few years early but the new roof would last 
twice as long as the roof we replaced. We saved the cost of removing the panels 
later to replace the roof and gained 50 years to save for the next roof 
replacement. Plus thousands of dollars a month in electric bills.

One of the other factors that influences the Reserves Policy in each community 
is the economics of the community members. Some wealthy residents prefer to 
maintain low reserves because they can invest at higher rates as wealthy 
individuals. And can afford large contributions when needed. Most cohousing 
communities are more concerned about economic diversity and maintaining 
affordability so they depend on robust savings with no surprises.

Sharon
----
Sharon Villines
Riderwood Village, Silver Spring MD
Founding member and 25 year resident in Takoma Village, Washington DC