Outside Income Limitation
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OUTSIDE INCOME LIMITATION

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.

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