Where Form 990 Schedule H 2023-2024

The checklist for homeowners associations to file form 1120 H is very brief. We ask you to contrast that with the checklist for form 1120; it is much longer, much more complex, and introduces you to the huge tax risks that exist for form 1120. That's the main reason why people opt to file form 1120 H, it's certainly not to get the comfort of a 30% tax rate that's twice as high as the taxes on form 1120. However, let's look at this checklist. It's very easy. The first thing the Association is to do is to make sure that you qualify to file form 1120 H. Two of these items are virtually automatic. The first one is the entity must be organized and operated as a homeowners association (which you probably are based upon your filing under state tax law). The second test is that 60% or more of your gross income must come from membership dues, fees, or assessments again, that's pretty much automatic for most associations. The third one is one where people seem to have a little bit more problem, that 90% or more of expenditures must be expended to maintain common area property. This includes reserved expenditures (something you can't do on form 1120) and also includes any related activities such as security, administration, management, etc. And the fourth test is virtually automatic for everybody, there cannot be any private benefit to a single individual member of the Association. The second test is simply to make a timely election to file Form 1120 H. This is done by filing the form or by filing an extension on Form 7 4 and then making a timely filing of the return within six months after the date of the extension. So finally, in that form is your next...