Instructions For Form 1120-H - U.s. Income Tax Return For Homeowners Associations - 2017 Page 5
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61120-H, a homeowners association
in the charter or other legal document
8822-B, Change of Address or
that doesn’t file its tax return by the
creating it), address, and EIN on the
Responsible Party—Business, to
due date, including extensions, may
appropriate lines. Include the suite,
notify the IRS of the new address. See
be penalized 5% of the unpaid tax for
room, or other unit number after the
the instructions for Form 8822-B for
each month or part of a month the
street address. If the post office
details.
return is late, up to a maximum of 25%
doesn’t deliver mail to the street
Item A. Type of homeowners asso-
of the unpaid tax. The minimum
address and the association has a
ciation. See Definitions, earlier.
penalty for a return that is over 60
P.O. box, show the box number
Item B. 60% gross income test. At
days late is the smaller of the tax due
instead.
least 60% of the association's gross
or $210. The penalty will not be
If the association receives its mail
income for the tax year must consist
imposed if the association can show
in care of a third party (such as an
of exempt function income. See
that the failure to file on time was due
accountant or an attorney), enter on
Exempt function
income, earlier.
to reasonable cause.
the street address line “C/O” followed
by the third party's name and street
Item C. 90% expenditure test. At
Late payment of tax. An association
address or P.O. box.
least 90% of the association's
that doesn’t pay the tax when due
expenditures for the tax year must
generally may be penalized
of 1%
If the association has a foreign
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consist of expenses to acquire, build,
of the unpaid tax for each month or
address, include the city or town,
manage, maintain, and care for
part of a month the tax isn’t paid, up to
state or province, country, and foreign
property, and in the case of a
a maximum of 25% of the unpaid tax.
postal code. Do not abbreviate the
timeshare association, for activities
The penalty will not be imposed if the
country name. Follow the country's
provided to, or on behalf of, members
association can show that the failure
practice for entering the name of the
of the timeshare association. Include
to pay on time was due to reasonable
state or province and postal code.
current and capital expenditures. Use
cause.
Employer identification number
the association's accounting method
Reasonable cause determinations.
(EIN). Enter the association's EIN. If
to figure the total.
If the association receives a notice
the association doesn’t have an EIN, it
Include:
about a penalty after it files its return,
must apply for one. An EIN may be
1. Salary for an association
send the IRS an explanation and we
applied for:
will determine if the association meets
manager or secretary.
Online by visiting IRS.gov/EIN. The
the reasonable cause criteria. Do not
EIN is issued immediately once the
2. Expenses for gardening,
attach an explanation when the
application information is validated.
paving, street signs, security guards,
association's return is filed.
By mailing or faxing Form SS-4,
and property taxes assessed on
Application for Employer Identification
association property.
Other penalties. Other penalties can
Number.
be imposed for negligence,
3. Current operating and capital
If the association has not received
substantial understatement of tax,
expenditures for tennis courts,
its EIN by the time the return is due,
reportable transaction
swimming pools, recreation halls, etc.
enter “Applied for” and the date you
understatements, and fraud. See
4. Replacement costs for common
applied in the space for the EIN. For
sections 6662, 6662A, and 6663.
buildings, heating, air conditioning,
more details, see the Instructions for
elevators, etc.
Specific Instructions
Form SS-4.
Don’t include expenditures for
Note. Only associations located in
Period covered. File the 2017 return
property that is not association
the United States or U.S. possessions
for calendar year 2017, and fiscal
property. Also, don’t include
can use the online process.
years that begin in 2017 and end in
investments or transfers of funds held
2018. For a fiscal or short tax year
to meet future costs. An example
Final return, name change, ad-
return, fill in the tax year space at the
would be transfers to a sinking fund to
dress change, amended return.
top of the form.
replace a roof, even if the roof is
If the association ceases to exist,
association property.
The 2017 Form 1120-H can also be
file Form 1120-H and check the “Final
used if (a) the association has a tax
return” box.
Item D. Enter the association's total
year of less than 12 months that
If the association changed its name
expenditures for the tax year including
begins and ends in 2018 and (b) the
since it last filed a return, check the
those expenditures directly related to
2018 Form 1120-H isn’t available at
box for “Name change.”
exempt function income. Use the
the time the association is required to
If the association has changed its
association's accounting method to
file its return.
address since it last filed a return
figure the entry for item D.
(including a change to an “in care of”
The association must show its
Item E. Show any tax-exempt
address), check the box for “Address
2018 tax year on the 2017 Form
interest received or accrued. Include
change.”
1120-H and take into account any tax
any exempt-interest dividend received
To amend a previously filed Form
law changes that are effective for tax
as a shareholder in a mutual fund or
1120-H, file a corrected Form 1120-H
years beginning after December 31,
other regulated investment company.
and check the “Amended return” box.
2017.
Line 15. Other deductions.
Name and address. Enter the
Note. If a change in address occurs
Expenses, depreciation, and similar
association's true name (as set forth
after the return is filed, use Form
items must not only qualify as items of
Instructions for Form 1120-H
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