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?
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.
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