IRC Section 501(c)(4)
This code section establishes the basic parameters for qualifying as a tax exempt social welfare organization. The reason many associations want to qualify for this tax exempt status is that they do not pay taxes on interest income. For large associations with substantial reserve balances, this can represent a significant tax savings. See full copy of IRC Section 501(c)(4) here.
IRC Section 501(c)(7)
This code section establishes the basic parameters for qualifying as a (partially) tax exempt recreational organization. The reason many associations want to qualify for this tax exempt status is that they want to avoid the tax risks associated with Form 1120. Associations exempt under this section do pay taxes on interest income. See full copy of IRC Section 501(c)(7) here.
Need Assistance?
Please contact Gary Porter for your association tax exemption services. We serve associations nationwide.
Background information on Gary Porter, CPA
Gary Porter, CPA is licensed by the California, Nevada, and Oregon Boards of Accountancy. His CPA practice is limited to Common Interest Realty Associations, including homeowners associations, condominium associations, timeshare associations, fractional ownership associations, and condo hotel associations. Mr. Porter is the co-author of the PPC (Practitioners Publishing Company) Guide to Homeowners Associations and Other Common Interest Realty Associations, and Homeowners Association Tax Library. He is also the author of more than 300 published articles on financial matters related to homeowners associations. He has been working with homeowners associations since 1976.