City Reimbursement for Services Not Provided

Started by GerryF • 4 replies • 217 views

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GerryF (Ohio)
Posts: 3

Posted:

Our Ohio HOA receives partial reimbursement from the city for services not provided to our private drive. Trash collection, specifically. Is this considered exempt or non-exempt income in Section 528 / Form 1120-H?

ElleN (Idaho)
Posts: 4,420

Posted:

I would research the following:

Subtract the partial reimbursement from the total annual bill for these city services. Take the net amount and count it as a utility expense. The latter is exempt.

ElleN (Idaho)
Posts: 4,420

Posted:

Quote:

Posted By ElleN on 05/02/2024 2:37 PM
I would research the following:

Subtract the partial reimbursement from the total annual bill for these city services. Take the net amount and count it as a utility expense. The latter is exempt.

I mean utility expenses are exempt expenses.

TimB4 (Tennessee)
Posts: 21,059

Posted:

In my opinion, the money received would be non-exempt income, as it did not come from assessments.

There will be other opinions.

Your board will have to make the choice.
The treasurer, who signs the 1120-H, will have to decide if they are comfortable signing it or not.

DeanJ
Posts: 1,786

Posted:

Most cities in Ohio are funded by municipal income taxes and your HOA doesn’t pay municipal income tax. So ai don’t think it’s a refund of taxes paid and is non-exempt.

That said, I would treat it as exempt income.

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