26 U.S.C. § 528
A homeowners association (as defined in subsection (c)) shall be subject to taxation under this subtitle only to the extent provided in this section. A homeowners association shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.
A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall be equal to 30 percent of the homeowners association taxable income (32 percent of such income in the case of a timeshare association).
For purposes of this section-
The term "homeowners association" means an organization which is a condominium management association, a residential real estate management association, or a timeshare association if-
The term "condominium management association" means any organization meeting the requirement of subparagraph (A) of paragraph (1) with respect to a condominium project substantially all of the units of which are used by individuals for residences.
The term "residential real estate management association" means any organization meeting the requirements of subparagraph (A) of paragraph (1) with respect to a subdivision, development, or similar area substantially all the lots or buildings of which may only be used by individuals for residences.
The term "timeshare association" means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property.
The term "association property" means-
In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.
For purposes of this section, the homeowners association taxable income of any organization for any taxable year is an amount equal to the excess (if any) of-
For purposes of this subsection-
For purposes of this subsection, the term "exempt function income" means any amount received as membership dues, fees, or assessments from-
26 U.S.C. § 528
EDITORIAL NOTES
AMENDMENTS1997-Subsec. (b). Pub. L. 105-34, §966(d), which directed amendment of subsec. (b) by inserting before the period "(32 percent of such income in the case of a timeshare association)", was executed by making the insertion before the period at end to reflect the probable intent of Congress.Subsec. (c)(1). Pub. L. 105-34, §966(a)(1)(A), substituted ", a residential real estate management association, or a timeshare association" for "or a residential real estate management association" in introductory provisions.Subsec. (c)(1)(B)(iii). Pub. L. 105-34, §966(a)(1)(B), added cl. (iii). Subsec. (c)(1)(C). Pub. L. 105-34, §966(a)(1)(C), inserted before comma at end "and, in the case of a timeshare association, for activities provided to or on behalf of members of the association". Subsec. (c)(4). Pub. L. 105-34, §966(a)(2), added par. (4). Former par. (4) redesignated (5).Subsec. (c)(5). Pub. L. 105-34, §966(c), inserted concluding provisions "In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project." Pub. L. 105-34, §966(a)(2), redesignated par. (4) as (5).Subsec. (d)(3)(C). Pub. L. 105-34, §966(b), added subpar. (C). 1980-Subsec. (b). Pub. L. 96-605 substituted provision that all income of a homeowners association be taxed at a rate of 30 per cent for provision that all income of a homeowners association be taxed a sum computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b) of this title and struck out provision providing for alternative tax in case of capital gains. 1978-Subsec. (b)(1). Pub. L. 95-600, §301(b)(7), substituted "Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b)" for "Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income referred to in section 11" and struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed.Subsec. (b)(2)(B). Pub. L. 95-600, §403(c)(2), substituted provision related to amount being determined according to section 1201(a) for provision requiring an amount of 30 percent. Subsec. (c)(2). Pub. L. 95-600, §701(n)(1), substituted "by individuals for residences" for "as residences".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105-34, §966(e), Aug. 5, 1997, 111 Stat. 895, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996."
EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96-605, title I, §105(b), Dec. 28, 1980, 94 Stat. 3523, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1980."
EFFECTIVE DATE OF 1978 AMENDMENT Amendment by section 301(b)(7) of Pub. L. 95-600 applicable to taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. L. 95-600, set out as a note under section 11 of this title.Pub. L. 95-600, title IV, §403(d)(3), Nov. 6, 1978, 92 Stat. 2869, provided that: "The amendments made by paragraphs (2), (3), and (4) of subsection (c) [amending this section and sections 857 and 904 of this title] shall take effect on the date of the enactment of this Act [Nov. 6, 1978]."Pub. L. 95-600, title VII, §701(n)(2), Nov. 6, 1978, 92 Stat. 2907, provided that: "The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after December 31, 1973."
EFFECTIVE DATEPub. L. 94-455, title XXI, §2101(e), Oct. 4, 1976, 90 Stat. 1899, provided that: "Except as provided in subsection (f)(2) [set out as a note under section 216 of this title], the amendments made by this section [enacting this section and amending sections 216 and 6012 of this title] shall apply to taxable years beginning after December 31, 1973."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- shareholder
- The term "shareholder" includes a member in an association, joint-stock company, or insurance company.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.