HOA is asking owners to either vote for or against this IRS 70-604. I looked it up and it basically states that voting for this allows the election under Revenue Ruling 70-604 to “roll over” any excess “member income” (as defined by the IRS) from the current tax year to the next tax year. This is an important tax planning tool for the Association that requires approval by the membership in order to avoid possible dispute with the IRS in the event of a tax audit.
How does rolling the profits to next year benefit the home owners if they are not refunding it back to the home owners? It only benefits the association right?
We do not give legal advice in this form. You may which to consult with the tax attorney that represents the HOA, or with your own tax attorney for that matter so that you can make an informed decision.