Non-Profit Homeowners' Associations

[jimhall]

I am a member of a California non-profit homeowners' association. We regularly place funds into an interest-bearing account to be used for future maintenance on the common areas of our complex. All interest stays in the fund.

Is our non-profit status jeopardized by making interest on the maintenance fund? Is there a limit on how much interest we can make?

 

[lawrat]

I am a law school graduate. WHat I offer is mere information, not to be construed as forming an attorney client relationship.

You have both state and federal tax considerations:


FEDERAL:
http://www.irs.gov/prod/bus_info/eo/eo-faqs.html

http://www.irs.gov/prod/bus_info/tax_pro/irm-part/part07/36070d.html

STATE: I am not sure if this would help, but worth a look
http://www.lib.msu.edu/harris23/grants/znonprof.htm