I live in a 3-unit condominium in San Francisco.  We all pay monthly
HomeOwners Association dues that go into a bank account.  All funds in
the account go towards maintaning the building.

I want to know:

Do we need to file the 1120-H Tax Form every year?  If so, when is it
due (it's not clear from the IRS instructions on the form)?

Does the answer change if we invest our money in a money market
account vs not investing our money at all?

Here is a link to the form on the IRS site:
http://www.irs.gov/pub/irs-pdf/f1120h.pdf

As a business entity, a homeowners association must file a tax return
annually.  In order to take advantage of certain tax benefits, the
homeowners association must file Form 1120-H instead of Form 1120 or
Form 1120-A, which are forms for US corporation income tax returns.

Form 1120-H must be filed by the due date of the income tax return for
the year in which it will apply.  It must be filed separately for each
year for which it is to apply.  It should only be filed if the tax due
is lower than that on one of the US corporation income tax return
forms.

Whether or not it should be filed is independent of whether or not the
money is invested.  If it is not filed, then exempt function income
(such as dues) is taxable.  Even when Form 1120-H is used, interest
income is not exempt function income and is therefore taxable.

Sincerely,

Wonko

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Request for Answer Clarification by svseller-ga on 05 Oct 2005 17:48 PDT

I need clarification on the due date of the income tax return.  Is it
always April 15th for this form?

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Clarification of Answer by wonko-ga on 05 Oct 2005 18:26 PDT

Unless your Homeowners Association has opted for a tax year that is
separate from the calendar year, it would be due on April 15 (or the
next business day following April 15 if April 15 falls on a weekend).

Sincerely,

Wonko

The form 1120H is due by the 15th day of the third month following
your year end which is March 15 for calendar year corporations. Filing
an 1120H is an annual election which must be made on a timely filed
return so its important to file on time.