Mandatory club membership and POA

Started by ElizabethB1 • 4 replies • 1650 views

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ElizabethB1 (Arkansas)
Posts: 50

Posted:

I'm off on another tangent having already drafted a new set of bylaws for my neighborhood assoc:-)

As of 2006, in order to buy property in my community, you have to join the club (two golf courses, pools, restaurant). Under normal IRS rules, fees association with a "social" club are not tax deductible. I want to know the IRS's stance on MANDATORY membership.

Anyone have any ideas where I should start looking for info? Being tax season, I really don't feel up to calling the IRS.

Thanks.

Elizabeth in SC

PS Some additional info: the new mandatory memberships are non-equity. Currently there are several equity members from the "good 'ol days". There are three classes of non-equity membership

RogerB (Colorado)
Posts: 5,067

Posted:

Elizabeth, for a not-for-profit POA where ASSESSMENTS against the property are manditory under the Declaration of CC&Rs, that income is not taxable when using IRS forms 1120 or 1120-H. However, dues paid by people to join social clubs are taxable. That is a good reason to include the upkeep of those amenities in manditory ASSESSMENTS.

ElizabethB1 (Arkansas)
Posts: 50

Posted:

Roger,

I'm not looking at this from the POA or club side, but from the property owner/taxpayer side.

I'm trying to figure out if joining a mandatory club is tax deductible. If you buy property in this town, you have to join the club and pay the club's monthly fees.

I think this is a question for the IRS but wanted to check here first to see if anyone had any experience with this.

Thanks.
Elizabeth

ElizabethB1 (Arkansas)
Posts: 50

Posted:

One other thing. The club is a private club and does not answer to the POA. The POA can not tell the club what to do, yet to purchase property in the POA , you must join the club.

RogerB (Colorado)
Posts: 5,067

Posted:

Elizabeth, I do not think dues to a club qualify for a deduction. You might want to make that phone call to the IRS.

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