Form 1120-H - U.s. Income Tax Return For Homeowners Associations - 2005


Form 1120-H (2005)
How To Get Forms
effect, allow the association to
If the association is tax exempt
exclude exempt function income
under section 501(a), do not file
and Publications
(defined later) from its gross income.
Form 1120-H. See section 6033 and
Internet. You can access the IRS
related regulations. If the association
website 24 hours a day, 7 days a
Electing To File Form
loses its exempt status, see
week, at to:
Regulations section 1.528-8(e).
● Download forms, instructions, and
A homeowners association elects to
take advantage of the tax benefits
● Order IRS products online;
Homeowners association. There
provided by section 528 by filing a
● Search publications online by
are three kinds of homeowners
properly completed Form 1120-H.
topic or keyword; and
The election is made separately for
● Sign up to receive local and
each tax year and generally must be
1. A condominium management
national tax news by email.
made by the due date, including
association organized and operated
extensions, of the income tax return.
to acquire, build, manage, maintain,
CD-ROM. You can order Pub. 1796,
and care for the property in a
IRS Tax Products CD-ROM, and
This extension does not extend
condominium project substantially all
the time to pay the tax.
of whose units are homes for
● A CD that is released twice so you
Once Form 1120-H is filed, the
have the latest products. The first
association cannot revoke its
2. A residential real estate
release ships in late December and
election for that year unless the IRS
management association organized
the final release ships in late
consents. The association may
and operated to acquire, build,
request IRS consent by filing a ruling
manage, maintain, and care for a
● Current year forms, instructions,
request. A user fee must be paid
subdivision, development, or similar
with all ruling requests. For more
and publications.
area substantially all of whose lots
information on ruling requests, see
● Prior year forms, instructions, and
or buildings are homes for
Rev. Proc. 2005-1. You can find this
revenue procedure on page 1 of
● Tax Map: an electronic research
Internal Revenue Bulletin 2005-1 at
3. A timeshare association (other
tool and finding aid.
than a condominium management
● Tax law frequently asked
association), organized and operated
If the association does not elect to
questions (FAQs).
to acquire, build, manage, maintain,
use Form 1120-H, it must file the
● Tax topics from the IRS telephone
and care for the property that has
applicable income tax return (Form
response system.
members who hold a timeshare right
1120, etc.).
● Fill-in, print, and save features for
to use, or a timeshare ownership
Automatic 12-month extension to
interest in, real property of the
most tax forms.
make election. If the homeowners
timeshare association. A timeshare
● The Internal Revenue Bulletin.
association fails to make the
association cannot be a
● Toll-free and email technical
regulatory election to be treated as a
condominium management
homeowners association, it can get
an automatic 12-month extension to
Buy the CD-ROM on the Internet
To qualify as a homeowners
make the section 528 election
at /cdorders from the
association, the following must
provided corrective action is taken
National Technical Information
within 12 months of the due date
Service (NTIS) for $25 (no handling
(including extension) of the return.
See Regulations section 1.528-4
fee) or call 1-877-CDFORMS
See Regulations section 301.9100-2
for information regarding the
(1-877-233-6767) toll free to buy the
for more information.
“substantially all” test for
CD-ROM for $25 (plus a $5 handling
condominium management
A homeowners association should
associations and residential real
compare its total tax computed on
By phone and in person. You can
estate management associations.
Form 1120-H with its total tax
order forms and publications by
● At least 60% of the association’s
computed on either Form 1120, U.S.
calling 1-800-TAX-FORM
Corporation Income Tax Return, or
gross income for the tax year must
(1-800-829-3676). You can also get
Form 1120-A, U.S. Corporation
consist of exempt function income
most forms and publications at your
Short-Form Income Tax Return. The
(defined later).
local IRS office.
association may file the form that
● At least 90% of the association’s
results in the lowest tax.
expenses for the tax year must
General Instructions
Tax rate. The taxable income of a
consist of expenses to acquire,
Section references are to the Internal
homeowners association that files its
build, manage, maintain, or care for
Revenue Code unless otherwise
tax return on Form 1120-H is taxed
its property, and, in the case of a
at a flat rate of 30% for
timeshare association, for activities
condominium management
provided to, or on behalf of,
Purpose of Form
associations and residential real
members of the timeshare
A homeowners association files
estate associations. The tax rate for
Form 1120-H as its income tax
● No private shareholder or
timeshare associations is 32%.
return to take advantage of certain
These rates apply to both ordinary
individual can profit from the
tax benefits. These benefits, in
income and capital gains.
association’s net earnings except by


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