Reserve Fund and 1120H form

Started by SusanC2 • 2 replies • 1757 views

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SusanC2 (Montana)
Posts: 5

Posted:

I am President of a 20 single family home association in Montana. 2007 was the first year we were able to start a Reserve Fund. Do I include the amount that was moved to a separate money market account as a Reserve Fund in line C of Form 1120-H? It was money that had been accumulating over the past 3 years in the Association ..

RogerB (Colorado)
Posts: 5,067

Posted:

Susan, we only include actual expenditures and do not include additions to the Reserve fund. I do not consider building reserves to be an expenditure; and don't see it as applying based on their example given under the 90% rule. Line C is compared to line D to determine whether an HOA qualifies under the 90% rule.

SusanC2 (Montana)
Posts: 5

Posted:

Roger,

Thanks for the reply. I had been told conflicting interpretations by some other HOA's ..

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