Associations & Taxes Continued From Page 15


 


Property Taxes on Real Property Condominium associations generally do not pay real property taxes on common area property since common areas are  included in the valuation of the individual units. Members pay real property taxes on their units individually.


Employment Taxes


 should be taken to understand the criteria the State   Contract laborers are in business for themselves, have    has employees, the association is subject to all state and  classify laborers could result in interest and penalties on 


  and are deemed to be included in the valuation of the individual units.


 generally do not pay real property taxes on common area     are exceptions to this general rule: If associations, after being formed, buy real property for investment or other reasons, 


Personal Property Taxes


Depending on the taxing jurisdiction, associations may be assessed on personal property. Most associations do not have  an issue. Generally, real property is land and property that is  property is property that can be removed easily from the grounds, like furniture. A common target of counties assessing for personal property taxes, might be a golf course community open to the general public generating income from greens  


20 Community Associations Journal | April 2021 Tax Planning


It is advisable to contact your tax professional before    association and members are not taxable. It may be possible to structure a transaction to take advantage of this provision and other tax planning opportunities. It is generally too late to effectively take advantage of planning opportunities after the fact.


Red Flags


  noncompliance or not taking advantage of all potential    


  no or very little taxable income if the association meets 


  


    


    


  a potentially material taxable transaction.


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