An Alternative Opinion Regarding Restaurant Taxation ...and...a Personal Thanks from Us at Anthem Opinions

When we published an article submitted by Linda Kaplan, we concluded it by stating there might be differing opinions, asking others to comment on her piece.

With that in mind, we wish to thank Bill Breier, a CPA, for submitting this to us for publication. Mr. Breier has 45 years of experience in Audit & Taxation, in addition to vast experience as a Director of a major real estate developer. 

CPA Questions

Former IRS Agent on Recent Published Article

by

Bill Breier

Sun City Anthem Resident

Internal Revenue Code section 401(c) is included in the 400 series of the code which addresses pension, profit sharing, and stock bonus plans, which do not pertain to the taxation of HOAs.

What Linda is probably referring to is IRC section 501(c)(4) and 501(c)(7).

These two code sections were discussed in various Revenue rulings, which added to the complexity of the tax issues allowing an HOA to fall under the tax exempt rules.

In 1976 Congress added IRC section 528 specifically directed to the requirements allowing an HOA to elect exempt status for tax purposes (Form 1120H).

In addition to this code section, the IRS promulgated regulations addressing the requirements which discusses revenue  and expenditure tests that allow for the exempt status in the year of filing.

These regulations should be reviewed as to the definition of revenue and expenditure which are allowed for the calculation used to determine whether the HOA can file for exempt status on an annual basis.

Each year stands alone as to whether to file exempt status or as a regular corporation (Form 1120) filing.

This is determined annually based on the financial results of that year,  i.e. , NOL (net operating loss).

If a tax loss occurs, Form 1120 should be filed in order to establish the loss for past or future tax years.

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Note from us to all of you:

You can't believe how much Anthem Opinions thanks so many of you for your valuable input and support.

Actually, we have recently added our 1,600th active subscriber  and it is projected by November 1, 2017...our 5th anniversary of publication, we will cross the 2,000,000 mark of visits to our site.

Though we are thrilled that in 5 short years, we have become the #1 visited independent publication in Sun City Anthem, that is secondary to a note we just received.

...a  comment...actually a compliment...that we'd like to pass on to you, our readers.

It said:

"What makes your blog unique is how diversified it is with the various categories appealing to the different individuals in our community. 

Your demanding people who comment to use real names adds such credibility; you make residents and current and past board members welcome to send articles; and those who comment are diversified with many names of different residents rather than the other blog, where the same people are always present, only a few use their real name,  and so few new residents seem to participate.

It's Anthem Opinions which allows us to stay young as long as possible and it certainly is obvious, you show no fear to say what's on your mind in a professional and convincing manner.

Keep up the great work."

From Allen Weintraub and myself, thanks.  

Those words "keep us going."

Dick Arendt