A service of:
Community123.com
Professional websites for HOAs & condos, since 2004
🎁 1st year FREE for HOATalk members! →
← Return to Topics List

income Tax Deductions

Started by FrankD2 • 7 replies • 2149 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in

FrankD2 (New Jersey)
Posts: 58
Posted:
I would like different thoughts as what expenses can be ductuded againest taxable income.
Our auditor(tax preparer) included some of the following deductions.
% of office managers time,%of home office of management company,%of
club housewater,%of clubhouse electric,% of telephone and %of other club house expenses.The final report showed a loss on investments.
It is my understanding that deductions should be those expenses directly
related to obtaining the income, such as bank charges
DonnaS (Tennessee)
Posts: 5,671
Posted:

Frank,
What are you, a condo, HOA or what? Do you not have an operating Budget?, % of Home, Office of Management Company? What does that mean? Do you have a M.C that works out of their home? That should not be your cost. You need to enlighten us please.
FrankD2 (New Jersey)
Posts: 58
Posted:
Donna

We are a hoa. The manager is on sight.
She puts a mininal effort in working with investmants.
The tax preparer put her time expended in investments and
added overhead items as a %percentage of her time to the tax deduction.
Some of these items were water, electric, collecting monthly assessments,
time spend by the management home office on accounting etc.
It seems the preparer each year comes up with enough deuctions to offset the income
FrankD2 (New Jersey)
Posts: 58
Posted:
Donna

We are a hoa. The manager is on sight.
She puts a mininal effort in working with investmants.
The tax preparer put her time expended in investments and
added overhead items as a %percentage of her time to the tax deduction.
Some of these items were water, electric, collecting monthly assessments,
time spend by the management home office on accounting etc.
It seems the preparer each year comes up with enough deuctions to offset the income
FrankD2 (New Jersey)
Posts: 58
Posted:
Donna
basically I would like to know what the irs allows as a dedution
againest investment income
RogerB (Colorado)
Posts: 5,067
Posted:
Frank, your deductions depend on whether you use IRS form 1120 or 1120H. The deductions you listed indicate you are using 1120. Unless your HOA's income from sources other than assessments, 'outside sources', is greater than $1500 I suggest you use 1120H. Many HOA's only 'outside source' of income is from the yield on investments. Using IRS form 1120H the deductions allowed are (a) the previous year's taxes, (b) costs directly involved in managing investments (some HOAs use 10% of the management fee - based on a ruling I posted on about 2 years ago) and (c) the standard $100 deduction.
FrankD2 (New Jersey)
Posts: 58
Posted:
Roger
we do use 1020H. taking 10% of management fees or any % is not realistoc.
The % may far exceed the income.If I were an irs agent ,I would want detail
listing of expenses.
frank
FrankD2 (New Jersey)
Posts: 58
Posted:
Roger
we do use 1020H. taking 10% of management fees or any % is not realistoc.
The % may far exceed the income.If I were an irs agent ,I would want detail
listing of expenses.
frank

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

  • ✓ Ask follow-up questions
  • ✓ Share your experience
  • ✓ Get expert advice
  • ✓ Access 350,000 discussions
Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here

Terms of Use and Privacy Statement