Non Exempt Income & 1120-H

Our association does not produce non-exempt revenue other than Interest Income on a CD. On the 1120H form, Exempt Income less Exempt Exp's is a deficit of $10,000. Interest income is $500 and the total IRS deduction is a standard $100. Therefore, the association should still pay tax on $400 even though there was a loss from the exempt function income/expense, correct?? Thanks!

We currently do not employ one. That is why I was asking in this forum.

Bob,

I am not a CPA.

Like your Association, my association only has interest income as taxable income.
Like your Association, my association does not produce income. Hence, we have no deductions on form 1120-H.

Your choice is to pay 30% on the $400 using form 1120H

OR

File form 990 and pay taxes on assessments as well as interest (less allowable deductibles).

NOTE: If you have never done a form 990, you should have a CPA file your taxes.

NOTE: Form 1120-H is to be filed no later then the 15th day of the third month after your fiscal year ends.

Hope this helps,

Tim