Exempt Function Income

Started by LisaB11 • 3 replies • 3690 views

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LisaB11 (Florida)
Posts: 5

Posted:

Tax season just passed and I have been wondering if Fines paid by membership violations to the rules and restrictions are considered exempt or non-exempt function income. I have read several accounts blogs some that say late fees and interest on late payment of assessments are exempt-function income. Is this correct? What about fines as stated above?

MaryA1 (Arizona)
Posts: 7,043

Posted:

Lisa,

Fines are considered exempt function income, the same as late fees and interest on late payment of assessments. The key is that the income comes from the members of the HOA, thereby making it exempt function income. Generally the only non-exempt function income that most HOAs have is interest earned on savings accts, CDs, etc.

RobertR1 (South Carolina)
Posts: 5,164

Posted:

Good job Mary.
I am sure someone will voice an exception, happens every time, and them we spend two pages dealing with the 2 % exception, and the 98% is never noted.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Robert,

That would never happen if everyone would just remember that I'm always right!

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