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Homeowner's Association Election for Section 528

Level 1

I'm filing a late 1120-H.  I believe we can claim automatic late election relief up to 12 months from due date with Section 528.  How do I input this into Lacerte?

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2 Comments 2
Level 15

There is no input for this. I believe the corrective action is to file the 1120H instead of 1120. @sjrcpa or @abctax55 will help to see if I am correct. 

Per the instructions:

Electing To File Form 1120-H
A homeowners association elects to
take advantage of the tax benefits
provided by section 528 by filing a
properly completed Form 1120-H.
The election is made separately for
each tax year and must generally be
made by the due date, including
extensions, of the income tax return.
This extension does not extend the
time to pay the tax.
Once Form 1120-H is filed, the
association cannot revoke its election
for that year unless the IRS consents.
The association may request IRS
consent by filing a ruling request. A
user fee must be paid with all ruling
requests. For more information on
ruling requests, see Rev. Proc.
2020-1, 2020-1 I.R.B. 1 (or any
successor), available at IRS.gov/irb/
If the association does not elect to
use Form 1120-H, it must file the
applicable income tax return, for
example, Form 1120, U.S.
Corporation Income Tax Return.
A homeowners association should
compare its total tax computed on
Form 1120-H with its total tax
computed on Form 1120. The
association may file the form that
results in the lowest tax.
Automatic 12-month extension to
make election. If the homeowners
association fails to make the
regulatory election to be treated as a
homeowners association, it can get
an automatic 12-month extension to
make the section 528 election,
provided corrective action is taken
within 12 months of the due date
(including extension) of the return.
See Regulations section 301.9100-2
for more information.

Here's wishing you many Happy Returns
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Level 15

Thanks for the tag, George.  But I do ONE 1120-H so I'm not the expert 🙂

I do believe that simply filing the 1120-H makes the election; the fact it's late will likely mean love letters from the IRS tho.

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