Tax 101 What You
Need to KnowNeed to Know
community manager, it’s important to understand associations, including homeowners’ associations (HOAs). The following is an overview.
A Form 1120-H or Form 1120
All residential real estate management associations, condominium management associations, and timeshare of two forms: Form 1120-H: U.S. Income Tax Return for Homeowners Associations
Form 1120: U.S. Corporation Income Tax Return
60% Exempt Function Income Form 1120-H is simpler and shorter than Form 1120, but an
26 Community Associations Journal | February 2024
t the close of each year, community associations with a December 31 tax year-end need to start thinking about
year must consist of exempt function income (membership fees, dues or assessments of homeowners).
manage, maintain, or care for its property. (For timeshare provided to members of the timeshare association.)
individuals for residences.
managing, maintaining, or caring for association property or by a rebate of excess membership dues, fees, or assessments.
Form 1120 is the alternative for associations that do not meet the
More Than 40% Non-Exempt Income
Form 1120 is the alternative for associations that do not
For HOAs: What You
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