Taxes - Form 1120-H

Started by RussellB5 • 8 replies • 682 views

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RussellB5 (Montana)
Posts: 23

Posted:

Our HOA earned some money selling hay to farmers.
Therefore I assume we need to file Form 1120-H.

Does anyone have experience with this? It seems simple enough. My guess is we report the hay money on the form.
Is it worth getting a tax person to do this? It's not that much money earned.

DouglasK1 (Florida)
Posts: 2,046

Posted:

I think you should be filing a return every year, even if you don't have non-assessment income. Most associations to use 1120H. We've always done our own. Since the tax rate is a straight 30% on the amount over $100, there are no difficult calculations.

Escaped former treasurer and director of a self managed association.

GeorgeS21 (Florida)
Posts: 3,808

Posted:

Most not for profit HOAs - and most HOAs are not for profit, file IRS Form 1120-H annually - if you haven't been doing this, it is time to fess up and catch up.

RussellB5 (Montana)
Posts: 23

Posted:

It seems whoever was filing the returns is gone.

So it looks like the best thing to do is get some professional help from an accountant to file whatever is needed. The safest thing to do.

The form 1120-h lists "Total exempt function income." which I am not certain if that means dues/assessments or income from sales (of hay) or both.
We take in more than we spend on maintenance because we have a reserve fund (for future expenses) and we have another reserve fund that is another future obligation.
Surely the government doesn't tax a non-profit for stuff that is not a profit (dues) and reserve.
I assume the hay sales would be taxable.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Exempt income would be the assessments.
Any money received from the sale of hay would be taxable.

RoyalP
Posts: 1,104

Posted:

Quote:

Posted By RussellB5 on 03/12/2019 2:28 PM
It seems whoever was filing the returns is gone.

So it looks like the best thing to do is get some professional help from an accountant to file whatever is needed. The safest thing to do.

The form 1120-h lists "Total exempt function income." which I am not certain if that means dues/assessments or income from sales (of hay) or both.
We take in more than we spend on maintenance because we have a reserve fund (for future expenses) and we have another reserve fund that is another future obligation.
Surely the government doesn't tax a non-profit for stuff that is not a profit (dues) and reserve.
I assume the hay sales would be taxable.

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RoyalP
Posts: 1,104

Posted:

RussellB5,

ALL necessary information is contained within the above attached 3 page document.

Read and reread same until you understand.

You may very well need a CPA because of your FAILURE to file the REQUIRED returns negating your ability to use a 'do-it-yourself' 1120(H).

BEST OF LUCK

John B.

RoyalP
Posts: 1,104

Posted:

1120(H) Instructions

RussellB5 (Montana)
Posts: 23

Posted:

I figured it out. It's a fairly simple form. However, since my predecessor didn't file a return, I'm having a CPA look into what needs to be done.

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