HOA Reselling Lots

Our HOA foreclosed on three lots (no homes on them yet) and the HOA now owns them. We've been carrying them for several years. The previous owners were several years delinquent on annual dues. It cost us some attorney fees and on one of the lots we paid the back taxes to the county. For the last few years we've paid the property taxes and we were not able to assess any annual dues on those lots. We now have someone interested in buying all three. I heard to maintain non-profit status for the HOA we are not permitted to sell the lots for more than the costs we incurred. Is thast true? My take is our costs are all the delinquent dues prior to foreclosure which we were not able to collect, plus the lost dues we were not able to assess for the last few years after the foreclosure, plus the attorney fees and back taxes and the ongoing property taxes. Do I have that right?

If we sell for more than our costs, could we simply deposit the excess funds into our operating budget and reduce all member dues by that amount so thereby avoiding any profit?

If the deal moves forward, we will need our attorney to review it anyway and I will ask her then about profiting. Just looking to get an idea now from the group what to expect. I couldn't find this topic anywhere in the archives.

You would have to pay federal income taxes on any profits but I don't think you lose your non-profit status.

It's not a good idea to reduce dues to save taxes because your revenue loss would be more than your tax savings.

There are many variables so I agree with Bill, check with an accountant and/or lawyer.