A nonprofit corporation (the status of most homeowner associations) is allowed to engage in some revenue-producing activities without violating its nonprofit status.
Sixty percent (60%) or more of the
gross income of the association must consist of membership dues, fees, and assessments for it to qualify for nonprofit status. (
Rev. & Tax Code §23701t(a)(1).)
RECOMMENDATION: Associations with significant non-dues income should talk to a CPA who specializes in homeowners associations. Associations needing legal assistance can
contact us.
To stay current with issues affecting community associations, subscribe to the
Davis-Stirling Newsletter.