Reserve Accts. and Taxes

Started by RobynH1 • 2 replies • 1143 views

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RobynH1 (South Carolina)
Posts: 39

Posted:

Are reserve account funds exempt from taxes when figuring gross income?

I thought I read sometime back that was the purpose of creating reserve accounts.

Thank you for any light someone may shine on this subject.

Robyn

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Basically all income received from dues, assessments, etc. is tax free. It is income received from other sources (like renting out the pool, greens fees, etc.) that has to be addressed.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By RobynH1 on 11/06/2012 2:04 PM
Are reserve account funds exempt from taxes when figuring gross income?

The interest earned from those funds is taxable.

If your filing 1120-H, Assessments are usually exempt (must meet the requirements). Since the Reserves are funded from assessments, the funds within the reserves would typically be exempt.

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