Renting of Part of a ClubHouse??

Started by AlexL1 • 3 replies • 1102 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

AlexL1 (Florida)
Posts: 305

Posted:

Part of the existing clubhouse has an office complex attached to it. In view that we now have the clubhouse, who can we legally "rent" the office complex to and still be within our tax exemnpt status? Rather than the office complex remaining vacant, we could possibly rent it out to some Organization, etc that could pay us(the HOA) a monthly rental and in that aspects, the rental money would be coming in and the office complex would be occupied.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Non profits CAN have income revenue and as long as your documents don't prevent it, the office space in the clubhouse could bring in revenue. Use this revenue to offset the cost of running the building.

JamesM14 (Delaware)
Posts: 17

Posted:

Just remember to file your income taxes.

KirkW1 (Texas)
Posts: 1,665

Posted:

The thing is that most people don't realize that there is a difference between being a non-profit and tax exempt. As far as the IRS is concerned if your rental income exceeds some percentage of total income then you must pay taxes on that portion.

Having said that, from where I sit this still looks like a good proposition. In the end your organization will not have to collect as much from the membership even if that amount is diminished by some tax liability.

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here