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    Homeowner Association

    A condo association has a federal net operating loss from prior years when it filed as a corporation (1120).

    This year the condo association qualifies for homeowner association taxation (1120-H).

    For the current year, the 1120-H tax is less than the 1120 tax, even if the NOL carryforward is deducted on the 1120. An NOL deduction is not allowed on an 1120-H.

    Question: if the condo association files the 1120-H for the current year, what happens to the NOL carryforward? Since it cannot be deducted on the 1120-H, does it carryover in full to next year? Must it be reduced by the amount that would otherwise have been deducted on the 1120 return?

    Thanks in advance.
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