cksiiEditor (Colorado)
Posts: 12
Posts: 12
Posted:
The company, which we use to help enforce covenants, attends our monthly HOA board meetings. The topic of additional dues came up and the representative for the management company said that we needed to be careful with regard to "excess" dues. He said that the HOA must spend what it takes in or the non-profit status of the HOA could be lost and we would be taxed at 30-plus percent. He did say that the IRS allows for reserve funds and said that IRS guidelines exist with regard to this specif issue.
Here are my questions. What would be considered "excess" funds? Is there a dollar amount or percentage of revenue amount? Where can I find the IRS guidelines for properly creating and maintaining reserve funds?
Thanks.
Here are my questions. What would be considered "excess" funds? Is there a dollar amount or percentage of revenue amount? Where can I find the IRS guidelines for properly creating and maintaining reserve funds?
Thanks.