Employee Identification Number

Started by PeterS2 • 5 replies • 2704 views

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PeterS2 (Wisconsin)
Posts: 2

Posted:

We just transfered control of our HOA from the developer and they told me I needed to apply for a Employee Identification Number (EIN). So I did!

Does this mean that as an HOA I will have to file a tax return as well?

RogerB (Colorado)
Posts: 5,067

Posted:

Yes, HOAs must file tax returns. There has been considerable discussion on this. Click on Search, seach, view, and read.

RogerB

MarshaW
Posts: 9

Posted:

Roger,
We are a new HOA (since Aug. 2005) and I am looking into liability insurance for our common areas this coming year. Is this expense deductable on our 1120H tax return ? What field would you enter it ?

Also, our developer turned over control to the HOA this past August 2005. Do file this year or wait until next year when we have an entire year of doing business as an HOA ?
Do we just use the calendar year 2005 or should we make our fiscal year begin Aug 2005 to Aug 2006 ?
Thanks,
Marsha

RogerB (Colorado)
Posts: 5,067

Posted:

Marsha, the taxable items on 1120-H are shown on lines 1 to 8; this includes interest and dividends from investment of reserve funds which for many HOAs are the total gross income which is taxable.

Line B includes income from assessments and other exempt function income (unless there is significant income beyond assessments the 60% rule is easily met). Line C is expenses for insurance, maintenance, management, and includes reserve fund additions (these are used to meet the 90% rule).

Check your bylaws, some establish the fiscal year. The tax year and your federal identification number may already be established if your developer has been filing the HOA taxes. If the developer did not file in 2005 you need to do so immediately; 1120-H taxes are due by 3/15/06.

RogerB

MarshaW
Posts: 9

Posted:

Are these taxes the same as for filing personal taxes - in other words, if your taxes are postmarked by midnight on 3-15-06, the irs accepts that. OR do they need to be to the Ogden, UT by 3-15-06 ?
Thank you for all your help and prompt replies.

RogerB (Colorado)
Posts: 5,067

Posted:

Postmarked by 3/15 Marsha.

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