1120-H Deductions

Started by EricB13 • 2 replies • 96 views

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EricB13 (Illinois)
Posts: 29

Posted:

Hello-

We are a community that has a private party rental room at our Clubhouse along with a swimming pool. Most of the taxable income is from the room rental and some is from pool guest fees.

When I was reviewing the recent tax return, I noticed that we only had the following deductions from income:

Insurance
Legal
Maintenance & Repairs
Office Expense
Taxes
Utilities
Management Company Fee

Is there anything that we're missing? I was surprised not to see any of our staff payroll or cleaning supplies as part of the deduction. And yes, this is done by an accounting firm but I'm not sold on it.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Form 1120-H only allows deductions for items associated with taxable income and not for the tax exempt (assessments) income.

It was likely easier to simply leave off the salaries then calculate how much was applied for rental income.

DeanJ
Posts: 1,786

Posted:

Quote:

Posted By EricB13 on 08/25/2025 3:13 PM
Hello-

We are a community that has a private party rental room at our Clubhouse along with a swimming pool. Most of the taxable income is from the room rental and some is from pool guest fees.

When I was reviewing the recent tax return, I noticed that we only had the following deductions from income:

Insurance
Legal
Maintenance & Repairs
Office Expense
Taxes
Utilities
Management Company Fee

Is there anything that we're missing? I was surprised not to see any of our staff payroll or cleaning supplies as part of the deduction. And yes, this is done by an accounting firm but I'm not sold on it.

Maybe supplies for stuff like paper products at the club house.

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