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I have a client who has created an HOA -- for his condo rentals. My question is what are the MA rules for the 1120-H. This condo association only has exempt income from the condo fees. So we file an 1120-H for the federal with exempt income federally. My confusion is for MA.. This is their 2nd year filing this form but my first year doing it.. -- the 1st year was done by another tax preparer and the clients never filed a return for MA..
When I called MASS DOR, they informed me that if the client had only exempt income, they did not have to file for MA... Is this correct? Because when I do the return in my Drake software, its saying that this has to be electronically filed with an excise fee to the state -- for the HOA...
Are there any written guidelines on the state web site.? I've checked out the MA DOR but haven't found anything that is clearly stated.
Just want to make sure clients get this done correctly.
Appreciate any help!
Advantages of filing form 1120-H:
But there are some pitfalls to filing form 1120-H. These need to be carefully considered before you file.
Disadvantages of filing form 1120-H:
Incorporated entities that qualify federally as homeowners associations under IRC § 528(c) will continue to file the appropriate Massachusetts corporate form, in the 355 series. Incorporated homeowners associations that qualify as tax exempt under IRC § 501(c)(4) will file the Form M990-T-62. Unincorporated entities that do not qualify as homeowners associations under IRC § 528(c) (such as the so-called "IRC § 277 filers") and that file a federal corporate form (usually the Federal Form 1120) must file a Massachusetts corporate excise return in the 355 series.
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