Where can I find out more about Florida Condo Associations and exemption from taxes? As well, how can I file for a refund for my condo association?
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I'm interested in finding how each state regulates the HOA /condo association property managers?
I live in a 32 unit bldg; it is 30 years old. Due to termites, all the common area surfaces were replaced, including decks, railings, etc; the siding was replaced with Hardee board type material. After the work was finished, we were "special assessed" about $30K. I would like to know if I can claim it on my taxes - either state and/or federal. And if so, how do I do it? I live in California.
I would like to know something about tax benefits if I fix up at least one of my condos to rent out. I have two, and probably will keep one condo , but the other I'd like to sell or rent. So what are the rules regarding how or when I should fix up the place for maximum tax benefit? Thanks... I don't need a particularly detailed answer because I know it may be complicated, a brief outline will help. Or perhaps point me in the right direction on the web for details. Thanks again. Cindi
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An important aspect of HOA finances is tax liability. Generally, HOAs are exempt from state and federal income taxes if:
- Most of its HOA units are used by individuals as residences
- It's organized and operated to buy, build, manage, maintain, and care for HOA property
- At least 60% of its gross income for the taxable year comes from HOA membership dues, fees, or assessments
- None of the HOA's net earnings or income goes to any individual, except if it's by a rebate of excess membership dues, fees, or assessments, for example
State and federal law require the HOAs and Condo Assocations to make an election to be treated as a tax-exempt organization. Also, even if the HOA is tax exempt, it must file a federal tax return.
The tax exemption excludes from the HOA's gross income all of the membership dues, fees, or assessments collected by the HOA. In addition, the HOA gets an automatic $100 deduction on its gross income. Essentially, then, a tax-exempt HOA is taxed only on its investment income, if it has any, and any other income it might have, such as from renting out a recreational facility to non-member/owners, less the $100 deduction.