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bgal380
New Member

HOA Special Assessments deductible?

Our Homeowners Association billed a Special Assessment to stabilize land on community property that benefited the entire community.  It was $1800.00 per household.  Is this deductible?

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Accepted Solutions
Opus 17
Level 15

HOA Special Assessments deductible?

No, it adds to your cost basis, which may affect your capital gains calculation when you sell.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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7 Replies
Opus 17
Level 15

HOA Special Assessments deductible?

No, it adds to your cost basis, which may affect your capital gains calculation when you sell.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

betsey_white
New Member

HOA Special Assessments deductible?

Where do you include this information in the return?
Opus 17
Level 15

HOA Special Assessments deductible?

You don't.  If you pay for improvements or upgrades to your personal home, whether yourself directly or through an HOA assessment for improvements, it is not entered on your tax return.  Instead, keep records of the assessment for as long as you own the home.  It may benefit you by reducing your capital gains tax when you sell.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
betsey_white
New Member

HOA Special Assessments deductible?

We did sell the property in 2018.  It was a rental for 2 years before we sold it (it was our primary residence prior to that) and we had to put $12,500 into an escrow hold due to a pending special assessment.  So that $12,500 came right off the top of our proceeds.
Opus 17
Level 15

HOA Special Assessments deductible?

In that case it is treated as a reduction or adjustment to the selling price, along with your real estate commission and certain other selling expenses.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
betsey_white
New Member

HOA Special Assessments deductible?

Thank you.  One final question: would I take that off the top of the selling price or reflect it as one of the selling expenses?
Opus 17
Level 15

HOA Special Assessments deductible?

It should have the same result either way.  If you got a 1099-S form reporting the selling price, you should not change the selling price in the tax return because that may trigger an IRS mis-match letter.
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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