Bill would grant tax deduction for homeowners association assessments - Chicago Tribune:
"The same residents also pay local property taxes to municipal, county or state governments. But unlike other homeowners, only their local property tax levies are deductible on federal tax filings. Their community association assessments that pay for government-type services are not. Now a bipartisan group of congressional representatives thinks that's inequitable and needs to be corrected. Under a new bill known as the HOME Act (H.R. 4696), millions of people who live in communities run by associations would get the right to deduct up to $5,000 a year of assessments on federal tax filings, with some important limitations:
• Deductions would phase out if their incomes exceed $115,000 for single filers, $150,000 in the case of joint returns.
• The property would have to be their principal residence, not a vacation or rental home.
• To qualify for write-offs, the assessments would have to be "regularly occurring," mandatory levies that directly benefit taxpayers' properties and that exist solely because of their automatic membership in the homeowners association.
The bill's primary author is Rep. Anna G. Eshoo, D-Calif. Co-sponsors include Reps. Mike Thompson, D-Calif., and Barbara Comstock, R-Va.. Though the bill has little chance of moving through the House or Senate during this election year, it sends a message to the legislative committees now working on possible tax code changes for next year: Congress needs to acknowledge the role the country's community associations play in providing municipal-type services. The way to do it is to allow deductions on a capped amount of the money residents are required to pay to support community services."
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The bill has industry support. I would be surprised if this passed, because it would cost billions of dollars in lost income tax revenues, but it it interesting to see bipartisan support for the idea. Here is link to the text of the bill.
1 comment:
No way. This just further embraces HOAs. Worse there is no obligation on the HOA to actually spend the money on providing services. These moneys will get captured by the HOA vendors. You'll have board and management companies justifying higher fees for management companies and assessments in general by arguing "after tax" costs. But the HOA is not obligated to spend any of these assessment monies on "municipal type" services. Instead it can simply fork it over to the HOA management companies and HOA attorneys. Of course this has industry support - the industry members are the biggest beneficiaries.
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