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

Form 1120-H (2005)

Page

acquiring, building, managing, or

must come from the members as

treasurer, chief accounting officer, or

caring for association property or by

owners, not as customers, of the

any other association officer (such

a rebate of excess membership

association’s services.

as tax officer) authorized to sign.

dues, fees, or assessments.

Assessments or fees for a

If a return is filed on behalf of an

● The association must file Form

common activity qualify but charges

association by a receiver, trustee, or

1120-H to elect under section 528 to

for providing services do not qualify.

assignee, the fiduciary must sign the

be treated as a homeowners

return, instead of the association

Examples. In general, exempt

association.

officer. Returns and forms signed by

function income includes

a receiver or trustee in bankruptcy

Association property. Association

assessments made to:

on behalf of an association must be

property includes real and personal

1. Pay principal, interest, and real

accompanied by a copy of the order

property that:

estate taxes on association property.

or instructions of the court

1. The association holds,

2. Maintain association property.

authorizing signing of the return or

2. The association’s members

3. Clear snow from public areas

form.

hold in common,

and remove trash.

If an association officer completes

3. The association’s members

Income that is not exempt

Form 1120-H, the paid preparer’s

hold privately within the association,

function income includes:

space should remain blank. Anyone

and

who prepares Form 1120-H but

1. Amounts that are not includible

4. Is owned by a governmental

does not charge the association

in the organization’s gross income

unit and is used to benefit the unit’s

should not complete that section.

other than under section 528 (for

residents.

Generally, anyone who is paid to

example, tax-exempt interest).

prepare the return must sign it and

Timeshare association property

2. Payments from nonmembers.

fill in the “Paid Preparer’s Use Only”

includes property related to the

3. Payments from members for

area.

timeshare project that the

special use of the organization’s

association or its members have

The paid preparer must complete

facilities, apart from the use

rights to use. These rights must

the required preparer information

generally available to all members.

arise out of recorded easements,

and—

4. Interest on amounts in a sinking

covenants, or other recorded

● Sign the return in the space

fund.

instruments.

provided for the preparer’s

5. Payments for work done on

For more information, see

signature.

nonassociation property.

Regulations section 1.528-3.

● Give a copy of the return to the

6. Members’ payments for

Taxable income. Taxable income is

taxpayer.

transportation.

the excess, if any, of:

Note. A paid preparer may sign

For more information, see

1. Gross income for the tax year,

original or amended returns by

Regulations section 1.528-9.

excluding exempt function income,

rubber stamp, mechanical device, or

over

computer software program.

When To File

2. Allowed deductions directly

Generally, an association must file

Where To File

connected with producing any gross

Form 1120-H by the 15th day of the

income except exempt function

File the association’s return at the

3rd month after the end of its tax

income. Allowed deductions include

applicable IRS address listed below.

year.

a specific $100 deduction. The

following are not allowed:

If the due date falls on a Saturday,

If the association’s

Use the following

● Net operating loss deduction

Sunday, or legal holiday, the

principal business,

Internal Revenue

association may file on the next

office, or agency is

Service Center

(section 172).

located in:

address:

business day.

● Deductions under part VIII of

Connecticut,

Private delivery services. You can

subchapter B (special deductions for

Delaware, District of

use certain private delivery services

corporations).

Columbia, Illinois,

designated by the IRS to meet the

If facilities are used (or personnel

Indiana, Kentucky,

“timely mailing as timely

Maine, Maryland,

are employed) for both exempt and

filing/paying” rule for tax returns and

Massachusetts,

nonexempt purposes, see

Michigan, New

payments. See the instructions for

Regulations section 1.528-10.

Hampshire,

Cincinnati, OH

Form 1120 for details.

New Jersey, New

Exempt function income. Exempt

45999-0012

Extension. File Form 7004,

York, North Carolina,

function income consists of

Application for Automatic 6-Month

Ohio, Pennsylvania,

membership dues, fees, or

Rhode Island,

Extension of Time To File Certain

assessments from

South Carolina,

Business Income Tax, Information,

(a) owners of condominium housing

Vermont, Virginia,

and Other Returns, to request a

West Virginia,

units, (b) owners of real property in

6-month extension of time to file.

Wisconsin

the case of a residential real estate

management association, or (c)

Who Must Sign

owners of timeshare rights to use, or

timeshare ownership interests in,

The return must be signed and

real property in the case of a

dated by the president,

timeshare association. This income

vice-president, treasurer, assistant

Form 1120-H - U.s. Income Tax Return For Homeowners Associations - 2005 Page 2

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