Brownsville, TX asked in Real Estate Law and Tax Law for Texas

Q: Am I an owner of real property according to IRS Instructions for Form 1120-H (2020)?

To my knowledge corporation referred to herein files 1120-H first time since its incorporation in 1981. It states it is a residential real estate association and claims exempt function income representing it came from me and others as "owners of real property".

I think I may be misrepresented in this matter. Instructions provide " Exempt function income consists of … fees or assessments from … (b) owners of real property in the case of a residential real estate management association..."

I am a common stockholder (no par, non assessable) in a Texas for-profit corp. The corporation is named on the deed to the mobile home park. I contend I am renting (leasing) the space occupied by my mobile home in it's MHP. Corporation contends I am deemed to be an owner along with all the other shareholders that occupy a space in the park. I have also been told I only a member of an HOA for tax purposes but not otherwise, I am a shareholder.

Related Topics:
3 Lawyer Answers

A: Hi:

The form you mentioned, 1120-H is only for a HOA "Home Owners Association" to use for filing. It allows them to claim some exemptions.

I'm not sure why you think that for has any bearing on your status as a homeowner. To be sure, in some trailer parks the HOA owns the land and while you own your "home/trailer" you do not own the land upon which it sits. In that case there are some taxes to pay, usually "personal property tax". If you own the land upon which you have your trailer, you will pay Real Estate Property tax. A "whole look" at your financial status and what you own, etc., would be needed to find some exemptions and other breaks.

Please let me know if you need more info.

A: The form you mentioned, 1120-H is only for a HOA "Home Owners Association" to use for filing. It allows them to claim some exemptions.

I'm not sure why you think that for has any bearing on your status as a homeowner. To be sure, in some trailer parks the HOA owns the land and while you own your "home/trailer" you do not own the land upon which it sits. In that case there are some taxes to pay, usually "personal property tax". If you own the land upon which you have your trailer, you will pay Real Estate Property tax. A "whole look" at your financial status and what you own, etc., would be needed to find some exemptions and other breaks.

Please let me know if you need more info.

Teri A. Walter
Teri A. Walter
Answered
  • Houston, TX
  • Licensed in Texas

A: Your for profit corporation owns the park, you lease the space from the corporation. Pretty straightforward.

If there's an HOA, that's a separate entity, with separate rights, obligations and tax issues. HOAs are typically set up as non-profit entities. Non-profits may or may not be taxable. Non-profits do not have owners, though they typically have members. It's not clear whether there is or is not an HOA involved here. If your corporation's property is a part of the subdivision operated by an HOA, then that corporation is the member of the HOA.

It's also not clear to me what corporation "contends" that you're an owner, what it contends you own, and what effect it may or may not have on anything.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.