Question:
IS A COLORADO LIMITED EXPENSE COMMUNITY REQUIRED TO FILE FEDERAL & STATE TAX RETURNS?
IF A HOA ELECTS OR DOES NOT QUALIFY (FOR TAX PURPOSES) NOT USE FORM 1120-H , ARE THE ASSESSMENTS NOT TAXABLE?
– Rundy
Answer:
Hi Rundy,
All homeowners associations that are not recognized by the IRS as exempt organizations must file federal and state tax returns. Associations that don’t elect or qualify to file Form 1120-H must file Form 1120. There are special rules for associations under IRS Code Section 277(a). This allows Associations to deduct operating expenses against membership income.
Disclaimer: We are not lawyers. The information provided on this website does not constitute legal advice.
