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HOA not incorporated - never filed tax returns

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    HOA not incorporated - never filed tax returns

    My HOA never filed a tax return in 40 years. It's simple, straight forward if qualified for form 1120-H but since they won't qualify for late tax returns and would have to file form 1120 for missed years (how many we shall see). There will be a tax liability with form 1120 since a chunk of the expenses is for 15-year depreciable property and some funds were transferred to the reserve account. I still have to break the news to the board I am concerned that the condo owners will be liable for the final tax bill since the HOA does not have the funds. Maybe this is a moot point since either the owners pay directly or the HOA needs to make a special assessment. I would suggest to only file form 1120-H for the current year and then see if the IRS is catching up on the non-filing. Any words of advise?

    #2
    This site has some helpful blogs and templates: https://hoatax.com/condo-association-tax-return/
    I believe the 1120-H has a higher potential tax rate than 1120.

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      #3
      Originally posted by jmcdtax View Post
      This site has some helpful blogs and templates: https://hoatax.com/condo-association-tax-return/
      I believe the 1120-H has a higher potential tax rate than 1120.
      Thanks, I have been to that site. I am also familiar to a degree with qualifications for form 1120-H and my HOA has only tax exempt income. This issues arising probably will need to be addressed with an attorney.

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        #4
        Originally posted by Gretel View Post

        Thanks, I have been to that site. I am also familiar to a degree with qualifications for form 1120-H and my HOA has only tax exempt income. This issues arising probably will need to be addressed with an attorney.
        Agree. Smart decision
        Always cite your source for support to defend your opinion

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