Form 1120-H (2021)

What Is IRS Form 1120 H 2021

IRS Form 1120 H 2021 is a specialized tax form for homeowners' associations, condominium management associations, and residential real estate management associations. This form allows these associations to benefit from certain tax exemptions. IRS Form 1120 H caters to the needs of these entities by simplifying the reporting of income and deductions relevant to their non-profit activities, distinguishing them from typical corporations that file Form 1120.

When to Use Form 1120 H 2021

Associations should consider filing Form 1120 H 2021 under the following situations:

• The association is a residential real estate management association.
• At least 60% of the association's gross income is from fees, dues, or assessments from association members.
• At least 90% of the association's expenses are for the acquisition, construction, management, maintenance, and care of association property.
• The association elects to file Form 1120 H, an annual choice.

How To Fill Out Tax Form 1120 H 2021

Filling out Tax Form 1120 H 2021 requires a careful approach to ensure all information is accurate:

Identification of the Association: 

Start by providing the name of the homeowners association, EIN, address, and the date of formation.

Income: 

List all sources of exempt-function income, including membership dues, assessments, fees, and any other income (interest, dividends).

Exempt-Function Income: 

Calculate the total exempt-function income to ensure it meets the 60% criteria.

Deductions: 

Record all applicable deductions related to the association’s exempt-function income.

Taxable Income from Nonexempt-Function Property:

Include all non-exempt function income minus deductions directly connected to the non-exempt income.

Tax Computation: 

Determine tax owed by applying the appropriate tax rate to the association's taxable income.

Payments and Refundable Credits: 

Indicate any estimated tax payments made during the year and any credits to which the association is entitled.

Sign and Date: 

An authorized homeowners association representative must sign and date the form, confirming its accuracy.

When to File 1120 H 2021 Form

The deadline for filing the 1120 H 2021 Form is typically the 15th day of the fourth month following the end of the association's tax year.

By understanding IRS Form 1120 H 2021 and adhering to the precise guidelines for filing, homeowners associations can navigate their tax obligations effectively and take advantage of the benefits offered by this tax form.