Changing to a ‘Not For Profit . Tax forms

Started by MikeR24 • 5 replies • 368 views

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MikeR24 (Florida)
Posts: 8

Posted:

We are changing our community from a ‘For Profit’, to a ‘Not For Profit ‘
Naturally our tax forms will be different.
Wondering which forms other ‘Not For Profit ‘ communities use.
Our accountant said we have options

BenA2 (Texas)
Posts: 1,273

Posted:

The answer is, whichever one is most favorable for the particular tax year. You have the option of Form 1120 or 1120-H. You can change year to year depending on which gives you the lowest tax liability.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Hold some horses here. Need some more details. Why are you changing to Not for Profit? Plus are you sure it is not a "non-profit" corporation status but NOT a charitable one?

I've been told that the IRS is the one that determines if your HOA is a "For Profit" or "Non-Profit". A non-profit HOA is funded ONLY by it's members for it's member by collecting enough dues to meet their bills/maintenance. A for-profit works differently as they can generate a profit by having a "Golf course" type of amenity. Which means the profits of running/having such a set up goes toward HOA operations/golf course.

So how and why the change?

Former HOA President

MikeR24 (Florida)
Posts: 8

Posted:

We changed from ‘For Profit ‘ to ‘Not For Profit’ to enhance our chances of getting a State Grant to change our infrastructure. We were successful in attaining the grant. . Most of our neighbouring communities have been a ‘Not For Profit ‘ for years, we were a little slow on that, due to previous boards dragging their feet and ignoring a lot of issues.

MikeR24 (Florida)
Posts: 8

Posted:

I should mention we are in Florida

MikeR24 (Florida)
Posts: 8

Posted:

I should mention we are in Florida

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