QUESTION: We are a 6-unit unincorporated condo association. Do we have to file a tax return? We have never done so and were now wondering if we are out of compliance.

ANSWER: Both incorporated and unincorporated associations are required to file tax returns. An unincorporated association is treated the same as a corporation for tax purposes.

There is a difference when it comes to state taxes. An unincorporated association is not subject to the $800 minimum corporate tax. Corporations in California pay an annual franchise fee of $800 for the privilege of doing business in the State. However, many associations qualify for an exemption from that annual fee under Revenue & Tax Code §23701t. In some instances, the exemption may be retroactive, resulting in a refund of prior payments. If taxable income is less than $100, a California corporate return is not necessary.