The community in which I live is governed by a Homeowners Assn, which is registered as a Florida non-profit organization. Issue has arisen regarding taxes which might be due on "Reserve Funds." Since the Assn owns the paved roads, plus retention ponds, there is a need for building up considerable reserves in order to fund periodic maintenance, and occasional major resurfacing (roads) or re-engineering/rebuilding of ponds. Past Board policy has avoided building reserves -- because of the belief that they would have to pay taxes on them. Does anyone know what FIT law is in this area? Since we're talking upwards of $500,000 potential obligation for the two projects, the annual tax "cost" would be significant -- probably larger than the total budget for normal yearly expenses, so this has deterred Board from building reserves. Since the ByLaws also _require_ the Board to maintain these facilities, there is clearly a Catch-22, if FIT is due on the reserve funds or interest earned as they accrue in preparation for meeting the obligation to rebuild and maintain. Does anyone have an answer to this? A cite would also be appreciated. Bill
- posted
18 years ago