Tag Archives: revenue

Association Taxation and Reserves

The Internal Revenue Service (“IRS”) excludes from an association’s taxable income those amounts which are properly kept and used for capital contributions.  In several significant Revenue Rulings, the IRS considered special assessments for major repairs and replacements to be capital contributions in addition to capital contributions to reserve funds from annual assessments.

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What You Must Know Before Renting Out Homeowner Association Facilities

 

Many associations are considering a range of revenue-generating measures to offset ever-tightening budgets. But before you rent out your clubhouse or sell memberships to your golf course, pool, tennis courts, or other facilities to non-owners, keep a few critical rules in mind.

1) Consider the liability. The biggest issue that keeps associations from renting out their facilities to non-owners is liability. Check with your insurance carrier to find out if injuries to non-owners and injuries caused by non-owners would be covered under your current policy. Chances are they won’t, and it’ll be much more expensive to expand your policy to include that coverage. Once you know the additional insurance costs, you need to weigh them against the potential new revenue to determine whether the financial gain adequately offsets the added cost.

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MD: Ocean Pines mulls cost of appealing tax case

News items of national interest regarding Condominium and Homeowner associations, compiled by the Community Associations Network

After consulting with two attorneys, the Ocean Pines Association board of directors is expected to decide soon whether to appeal a U.S. Tax Court ruling. Without a successful appeal, the association would owe the Internal Revenue Service a substantial amount of money in back taxes and interest.
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