Homeowners Association that operates as

[Karen Lee]

OK...new homeowners association formed because of flooding and bridge access destroyed. Residents now walk across a handmade 2 log bridge. Residents have received FEMA money and part timers contributed to the association to get a bridge built.

Now this homeowners assoc has a certificate of incorporation from the state "...a non-profit corp" and the letter from the IRS assigning the EIN with filing requirements being an 1120H.

At this late date...do you have any suggestions how to get "tax exempt" status going...formation of corp 8/3/09 on fiscal year ending 6/30/10.

Thanks IA

Karen

[ILLMAS]

To elect to have a NFP status you will need to re-apply for a new FEIN#, there you can elect the closing date of the fiscal year (06/30/10) and notify the IRS of a previously assigned FEIN#. But I think there is other things you need to look at first, you may need to contact the state and attorney general office in your state to see what is required. Having NFP status doesn't mean you are 100% Tax Exempt, for example the NFP will have to pay for sales tax. I am just wondering why not keep the current status if it's a homeonwers association? They are also tax exempt to a certain degree.

MAS

[Catherine]

To elect to have a NFP status you will need to re-apply for a new FEIN#, there you can elect the closing date of the fiscal year (06/30/10) and notify the IRS of a previously assigned FEIN#. But I think there is other things you need to look at first, you may need to contact the state and attorney general office in your state to see what is required. Having NFP status doesn't mean you are 100% Tax Exempt, for example the NFP will have to pay for sales tax. I am just wondering why not keep the current status if it's a homeonwers association? They are also tax exempt to a certain degree.

MAS

The 1120-H is also a MUCH simpler form than a 990 (or even 990-EZ). The tiny bit they (may) pay in tax could well be significantly less than what they'd have to pay to get the 990 done.

I have a couple 1120-H's every year; it would be extremely cost INefficient for them to try for tax-exempt status. YMMV.

[Karen Lee]

Well I can get through the 1120H without much problem with the exception that the Homeowners association was funded with their FEMA money of $69000.00. Do I just not report it anywhere on the 1120H? Is it considered capital or loans? If I report the 69000. as income they owe over $20,000.

Thanks

Karen

[jainen]

>>how to get "tax exempt" status going<<

I'm not sure what you want or why you want it. You already have tax-exempt status. You can't qualify as a 501(c )(3), which is what most people think of for non-profit although it's an entirely separate issue. The homeowners aren't likely to want their financial records open to PUBLIC access. (Yes, all sorts of people prowl through 990's for all sorts of reasons.)

[ILLMAS]

Is it a loan? Is going to be repaid back?

[Joel]

What did the homeowners association do with the FEMA funds? Did they expend them for the association purposes? Then there should be a deduction.

[Karen Lee]

Not to be paid back, these funds are to replace a bridge that connects their land to the rest of the world.

FEMA funds have been deposited into a bank account for the Homeowners Association. They have collected some maint $ for the road and have spent some $ for organizational costs. They have a balance in the bank at their FYE of over $60,000. Then after FYE there are some expenses for engineering, surveying etc.

The Homeowners Association was formed to pool FEMA funds for landowners to get this bridge replaced and road maintenance.

I am just confused on how to report the funding of the Homeowners Association without it being taxable. Tax Free money is used and there should be a Bridge Fund of X. The Fund is reduced by expenses for the bridge.

How do I do this with an 1120H? Not show the FEMA $ as income by not reporting the FEMA $ on the 1120H?

Thanks,

Karen

[Karen Lee]

>>how to get "tax exempt" status going<<

I'm not sure what you want or why you want it. You already have tax-exempt status. You can't qualify as a 501(c )(3), which is what most people think of for non-profit although it's an entirely separate issue. The homeowners aren't likely to want their financial records open to PUBLIC access. (Yes, all sorts of people prowl through 990's for all sorts of reasons.)

I'm not sure what you are trying to say. Did you read the OP?

Karen

[jainen]

>>Did you read the OP?<<

Certainly, but you didn't explain what tax-exempt status you wanted to get going, or for what purpose you (or the organization) would want to be anything other than what it already is. If you don't say what you want to do, how can we help you do it?

[ILLMAS]

Not to be paid back, these funds are to replace a bridge that connects their land to the rest of the world.

FEMA funds have been deposited into a bank account for the Homeowners Association. They have collected some maint $ for the road and have spent some $ for organizational costs. They have a balance in the bank at their FYE of over $60,000. Then after FYE there are some expenses for engineering, surveying etc.

The Homeowners Association was formed to pool FEMA funds for landowners to get this bridge replaced and road maintenance.

I am just confused on how to report the funding of the Homeowners Association without it being taxable. Tax Free money is used and there should be a Bridge Fund of X. The Fund is reduced by expenses for the bridge.

How do I do this with an 1120H? Not show the FEMA $ as income by not reporting the FEMA $ on the 1120H?

Thanks,

Karen

Ah they live on fantasy island, you should of said that since the beginning j/k. I see it this way, but it's only my opinion, don't quote me on this. I would exclude the FEMA money on thier tax return, however lets say the cost of rebuilding the bridge is going to cost them $100K and FEMA gave them $60K, I would just capitalize $40K and not the $100K, since FEMA gave them the $60K. Now for the old bridge, don't know if you were depreciating it in the past or if it's fully depreciated, but you are going to have the task of disposing of it on the books and tax return.

MAS

[Karen Lee]

Thanks...I got it!!!! It was all me not paying attention. Have a good weekend.

Karen :blink:

[Shadanny Martinez]

how much would one charge for this form?

[jklcpa]

35 minutes ago, Shadanny Martinez said:

how much would one charge for this form?

 

Sorry, we don't answer questions from the general public here.  This site is for only those that are tax professional, most of whom use one particular brand of software.

Additionally, that question is impossible for us to answer as the fees can vary quite a bit from one region to another, and it is up to the preparer to know his or her market and clientele the firm services.