Instructions For Form 1120-H - 2009 (Page 4 of 5) in pdf

Final return, name change, address

the depositary. Records of the deposits

penalty will not be imposed if the

change, or amended return.

will be sent to the IRS.

association can show that the failure to

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If the association ceases to exist, file

pay on time was due to reasonable

If the association prefers it can mail

Form 1120-H and check the “Final return”

cause.

the coupon and payment to: Financial

box.

Agent, Federal Tax Deposit Processing,

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Other penalties. Other penalties can be

If the association changed its name

P.O. Box 970030, St. Louis, MO 63197.

imposed for negligence, substantial

since it last filed a return, check the box

Make the check or money order payable

understatement of tax, reportable

for “Name change.”

to “Financial Agent.”

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transaction understatements, and fraud.

If the association has changed its

The financial agent cannot process

See sections 6662, 6662A, and 6663.

address since it last filed a return

foreign checks. If the association sends a

(including a change to an “in care of”

check written on a foreign bank to pay a

address), check the box for “Address

Specific Instructions

federal tax deposit, it may be charged a

change.”

•

penalty.

To amend a previously filed Form

Period covered. File the 2009 return for

1120-H, file a corrected Form 1120-H and

To help ensure proper crediting, enter

calendar year 2009, and fiscal years that

check the “Amended return” box.

the association’s EIN, the tax period to

begin in 2009 and end in 2010. For a

which the deposit applies, and “Form

fiscal or short tax year return, fill in the tax

Note. If a change in address occurs after

1120-H” on the check or money order.

year space at the top of the form.

the return is filed, use Form 8822,

Darken the “1120” box under “Type of

Change of Address, to notify the IRS of

The 2009 Form 1120-H can also be

Tax” and the appropriate “Quarter” box

the new address.

used if (a) the association has a tax year

under “Tax Period” on the coupon. For

Item A. Type of homeowners

of less than 12 months that begins and

more information on completing the

association. See Definitions on page 2.

ends in 2010 and (b) the 2010 Form

coupon, see the instructions in the

1120-H is not available at the time the

Item B. 60% gross income test. At

coupon booklet (Form 8109).

association is required to file its return.

least 60% of the association’s gross

Estimated Tax and

income for the tax year must consist of

The association must show its 2010

exempt function income. See Exempt

tax year on the 2009 Form 1120-H and

Alternative Minimum Tax

function income on page 2.

take into account any tax law changes

These items do not apply to homeowners

Item C. 90% expenditure test. At least

that are effective for tax years beginning

associations electing to file Form 1120-H.

90% of the association’s expenditures for

after December 31, 2009.

However, a homeowners association that

the tax year must consist of expenses to

does not elect to file Form 1120-H may be

Name and address. Enter the

acquire, build, manage, maintain, and

required to make payments of estimated

association’s true name (as set forth in

care for property, and in the case of a

tax. Because the election is not made

the charter or other legal document

timeshare association, for activities

until the return is filed, Form 1120-H

creating it), address, and EIN on the

provided to, or on behalf of, members of

provides lines for estimated tax payments

appropriate lines. Include the suite, room,

the timeshare association. Include current

and the crediting of overpayments against

or other unit number after the street

and capital expenditures. Use the

tax if estimated tax payments or

address. If a preaddressed label is used,

association’s accounting method to figure

overpayments apply.

include this information on the label. If the

the total.

post office does not deliver mail to the

Include:

Interest and Penalties

street address and the association has a

1. Salary for an association manager

P.O. box, show the box number instead.

Interest. Interest is charged on taxes

or secretary.

paid late even if an extension of time to

2. Expenses for gardening, paving,

If the association receives its mail in

file is granted. Interest is also charged on

street signs, security guards, and property

care of a third party (such as an

penalties imposed for failure to file,

taxes assessed on association property.

accountant or an attorney), enter on the

negligence, fraud, substantial valuation

3. Current operating and capital

street address line “C/O” followed by the

misstatements, substantial

expenditures for tennis courts, swimming

third party’s name and street address or

understatements of tax, and reportable

pools, recreation halls, etc.

P.O. box.

transaction understatements from the due

4. Replacement costs for common

Employer identification number (EIN).

date (including extensions) to the date of

buildings, heating, air conditioning,

Enter the association’s EIN. If the

payment. The interest charge is figured at

elevators, etc.

association does not have an EIN, it must

a rate determined under section 6621.

apply for one. An EIN may be applied for:

Do not include expenditures for

Late filing of return. In addition to

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property that is not association property.

Online — Click on the EIN link at

losing the right to elect to file Form

Also, do not include investments or

The EIN is

1120-H, a homeowners association that

transfers of funds held to meet future

issued immediately once the application

does not file its tax return by the due date,

costs. An example would be transfers to a

information is validated.

including extensions, may be penalized

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sinking fund to replace a roof, even if the

By telephone at 1-800-829-4933 on

5% of the unpaid tax for each month or

roof is association property.

Monday through Friday from 7:00 a.m. to

part of a month the return is late, up to a

Item D. Enter the association’s total

10:00 p.m. in the association’s local time

maximum of 25% of the unpaid tax. The

expenditures for the tax year including

zone (Alaska and Hawaii follow Pacific

minimum penalty for a return that is over

those expenditures directly related to

time).

60 days late is the smaller of the tax due

•

exempt function income. Use the

or $135. The penalty will not be imposed

By mailing or faxing Form SS-4,

association’s accounting method to figure

if the association can show that the failure

Application for Employer Identification

the entry for item D.

to file on time was due to reasonable

Number.

cause. Associations that file late should

Item E. Show any tax-exempt interest

If the association has not received its

attach a statement explaining the

received or accrued. Include any

EIN by the time the return is due, enter

reasonable cause.

exempt-interest dividend received as a

“Applied for” and the date you applied in

shareholder in a mutual fund or other

Late payment of tax. An association

the space for the EIN. For more details,

regulated investment company.

that does not pay the tax when due

see the Instructions for Form SS-4.

generally may be penalized

of 1% of

Line 15. Other deductions. Expenses,

the unpaid tax for each month or part of a

Note. Only associations located in the

depreciation, and similar items must not

month the tax is not paid, up to a

United States or U.S. possessions can

only qualify as items of deduction, but

maximum of 25% of the unpaid tax. The

use the online process.

must also be directly connected with the

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Instructions for Form 1120-H

Instructions For Form 1120-H - 2009 Page 4

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