Tax Question (1120H form)

Started by CraigA • 4 replies • 1898 views

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CraigA (Massachusetts)
Posts: 8

Posted:

Hello,

I'm completing the 1120H form for my association. We're a 13 unit association that generated $25,000 in condo fees in 2008. Our 2008 expenses were $21,000. Our only income (outside of condo fees) is $790 that our coin-op laundry machine vendor pays us (we have a 1099 for this). This basically breaks us even in what we paid in electricity and water for the machines. I'm completing the 1120H form and because I don't have any deductions other than the the standard $100 I'm having to pay 30% tax on the $790. Am I missing something?

I was thinking of deducting the electricity under the Repairs and maintenance or rent line in the section "Deductions "directly connected to the production of gross income, excluding exempt function income." This would actually bring the "amount owed" line down to a negative number. Can you file with negative amount owed?

Any feedback would be appreciated.

Many thanks,

-Craig

GeorgerwilliamsW (Indiana)
Posts: 975

Posted:

Sounds to me like you have a good handle on the 1120H. If you can document the amount of electricity and water used, it can offset the non-exempt-function income.

However, you can't file with a negative amount. Just show zero.

It is such a small amount, I doubt it will trigger any IRS review. But you never know.

It may be worthwhile to separately meter the laundry facilities for future documentation.

SusanW1 (Michigan)
Posts: 5,202

Posted:

No deductions for a laundry room? Repairs? Paint? upgrades? Signage? Laundry attendant?

CraigA (Massachusetts)
Posts: 8

Posted:

The association just entered into it's 3rd year. The laundry room is small, only 2 washer and 2 dryers serving 13 one-bedroom units. The repairs (not there have been any yet) are the responsibility of the machine vendor. Our association is self managed so the laundry is cleaned and maintained by us (well, me). The only expenses I have are electricity and water. Our association get % of the coin-op revenue after certain minimums are met. In 2008 we received $790 which includes a back payment from 2007. If I pay 30% tax on that we're basically loosing money on the deal. I have some recipes for some plumbing work I could apply to this but again that puts it to negative number on the "you owe" and given we didn't pay any taxes there wouldn't be refund. I'm still not sure if on the final line you put zero or the negative number.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Craig,

I am a firm believer that the tax returns should be prepared by a professional, preferably a CPA. Even though the forms are not that complicated, IMO, the Treas does not need the liability that goes along with preparing the tax returns. The treasurer of my assn happens to be a CPA and she does NOT prepare our tax returns, mainly because of the liability issue. Since you appear to be having some difficulty in the preparation, all the more reason to hire a CPA.

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