81. Do HOAs have to pay tax on their saved capital expense account each year?

Under 26 U.S. Internal Revenue Code §528, homeowners associations are exempt from taxes on income carried over, as long as

  • at least 60 percent of gross income comes from membership assessments, and
  • 90 percent of that income is spent on maintaining the association’s property.

26 United States Code
Subchapter F – Exempt Organizations
PART VII – CERTAIN HOMEOWNERS ASSOCIATIONS
From the U.S. Government Publishing Office, www.gpo.gov