Homeowner Association's real estate taxes, deductible on my return?

Question

I guess this is a two parter: First, do the homeowners association have to pay real estate taxes? Second, since a HOA is a non-profit, the real estate taxes that they pay should then be deductible on my tax return (on a pro rata basis, obviously), right?

Please have some real sources, preferably either IRS publications, IRS rev rec rulings, or tax code citations. I searched myself but couldn't find any.

Let me clarify: I'm asking about the real estate taxes paid by the HOA on common property, for instance the parking lot, swimming pool, communal property like that. I understand I pay my own RE taxes on my house, and those are deductible.

And as for the apartment complex answer, this is different. The apartment complex gets the deduction because they pay tax on the income derived from the apartment complex, so they get to use that as a bona fide business expense. But, since an HOA is a non-profit, they get no benefit of deductions/expenses.

Answer 1

I was under the impression that non-profits were exempt from property-taxes. Could be wrong. Regardless, I seriously doubt you can deduct any property taxes your HOA would have to pay. That's like a tenent in an apartment complex trying to deduct on the property taxes the landlord has to pay simply because they pay the landlord rent.

Answer 2

Helping Wealthbuilder out.

The HOA pays real estate taxes on property it owns. An HOA can become a non-profit only if its activities benefit the community, and not just members of the association.

IRS Publication 530 says you can deduct assessments and property taxes paid to local governments, but not to associations.

Answer 3

NO!

HOA dues are NOT DEDUCTIBLE.

ONLY if the HOA sends a statement DETAILING the pro-rata tax amount for each household can you deduct as property tax. You can't make an arbitrary decision or calculation for yourself. This is commonly done in large condos in New York, but never for HOA's. The state of NEw York made condo owners responsible for collecting the taxes and no other entity has that authority.

I'm sorry I can't cite chapter/verse today. but I've prepared over 25000 returns.

The tax code section you are looking for would tell you that you can deduct taxes and mortgage interest. It will not say "you can't deduct so-and-so".



WealthBuilder
Tax Advisor

Answer 4

HOA does not usually pay the property taxes. That tax bill gets sent to the individual unit owners, at least it does with mine.

Property taxes are deductible. HOA dues are not.

Answer 5

laisses is correct, and you can deduct property taxes that you pay only. Why would you deduct something you didnt pay?

If you have a rental property then you can deduct HOA dues as well.