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Tax Law (Questions About Taxes)/Not for profit condo tax liability

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Question
We have funds that will remain in our account at year end. Other Board members feel that we must reduce our bank account to $0.00 by 31 December in order to avoid a 30% tax liability on any balance in our account. Can you help to educate us. I have not found answers in  501 nor in Florida Condo Statutes. Thanks in advance for your assistance.

Answer
Gary,

If you are not a 501(c)(4) exempt Homeowners Association because the organization is considered a Condo Management Association then you are limited to excluding from Gross Income the amounts derived from your exempt function (maintaining the Condominium complex, improving for safety, upgrading to be compliant with code, etc).  Any other income or fees are deemed taxable unrelated business income.  So to address the issue at hand, the amount of the bank account is not what is used to determine taxable income.  I would recommend having a tax advisor evaluate your specific situation to insure that the organization, by nature of operations, is not subject to any excise taxes based on operations or activity beyond its exempt purpose.

Best Regards,


Ryan Hasselmeier
Tax Advisor

AdvisorsGroupUSA

Tax Law (Questions About Taxes)

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Ryan Hasselmeier

Expertise

A degreed accountant with significant experience in taxation compliance and resolution at all levels of government regulation.

Experience

Experienced Tax Advisor, Consultant and Preparer for over 15 years. In private practice for nearly 12 years now. Experienced in all areas of taxation: International, Federal, State, Local, etc

Organizations
Current Chairman of the American Tax Professional Association Inc, a non-profit professional business association of accountants, tax preparers, consultants and advisors who specialize in compliance and representation of taxpayers before federal, state and local government regulators.

Education/Credentials
Bachelor of Business Administration in Accounting and Management Information Systems from Sam Houston State University in Huntsville Texas.

Awards and Honors
Passed all parts of the Enrolled Agent Certification Examination administered by the Department of the Treasury and a Registered Tax Return Preparer with the Internal Revenue Service.

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