HOA Legal Structure

Started by VernonT • 1 replies • 1466 views

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VernonT (Tennessee)
Posts: 3

Posted:

Our Hoa is voluntary and owns no property. We collect dues to cover the maintenance of the front entrance which is technically owned by two individual homeowners adjacent to the property. Do we have to incorporate or have some sort of legal status? Can we sell advertising on our web site to help offset the maintenance costs?

TimB4 (Tennessee)
Posts: 21,059

Posted:

A HOA is not required to incorporate.

Associations MUST file taxes on income. If you decide to sell advertising, the revenue from the advertising is considered revenue.

Incorporated or not, if you have income you must file taxes. Even the booster clubs at schools have to file tax returns. Therefore, you should have already gotten a tax identification number. If not, get one now and use it to make sure your bank account is filed in organizations name and under that id number.

Tim

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