Paul A Thomas wrote:

- quote -

The taking of the strip of land is an involuntary conversion
(emminent domain). I see this as a possible IRC 1033
exclusion - with the relocation of the gate. However, only
you will seem to know if you can make it fit that statute.

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Paul A Thomas <taxman[at]negia.net> wrote:

- quote -

That's the way it works in my state. The value of the common
area is included in the assessments to individual owners. No
tax paid by the association per se.

- quote -

....and you'll have to excuse me if I don't volunteer to go
to the next homeowner's meeting and explain all of this. <g
MTW

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"MTW" <mtwingcpa[at]yahoo.com> wrote
- quote -

Hmm...good point. Their financials don't show any property
tax paid, and haven't since I've had the account.

On that alone, it wouldn't be their gain (although they had
the city/county make the check to the Association.).

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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Paul A Thomas <taxman[at]negia.net> wrote:

- quote -

Does the homeowners association ACTUALLY OWN the land? In my
state, they probably wouldn't. Rather, the land would be
owned "in common" by the homeowners. Accordingly, it seems
to me that the monies related to the taking of the land
should be distributed ratably to the homeowners. (If they
all agree to pay the money back to the association as
additional "dues," that's a separate issue.)

If I were one of the individual homeowners, I would likely
treat this as a basis-reducing "return of capital," in
similar fashion to an easement. But, obviously, some
additional research is in order. <g
MTW

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One of my homeowners associations received some monies
during a street widening project. Part is to cover the cost
to relocate the front entrance gate, etc, and part is for
the county to take a strip of land (to widen the
right-of-way). It's way to much of a jump to call this
"exempt function income", so they're looking at a capital
gain if the amount allocated to the land purchase is greater
than their basis?

Anyone see it any differently?

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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