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Appendix 5C

  1. Property and equipment transferred to the CIRA from the developer or sponsor
    • Financial Reporting
    • Contributed capital

    • Inccome tax Treatment
    • Contributed capital if there is basis in the property and equipment. Otherwise, the transfer is not recorded.
  2. Funds contributed to the initial start-up of the CIRA, such as funds contributed by the developer to working capital
    • Financial Reporting
    • Contributed capital

    • Income tax treatement:
    • Contributed capital (Form 1120-H) or membership income (Form 1120 or Form 1120-C)
  3. Funds contributed by the developer to replacement funds
    • Finacial Reporting:
    • Contributed Capital

    • Income Tax Treatment:
    • Contributed capital
  4. Initial contributions required by new members upon purchase of units to provide the CIRA with additional working capital (usually equal to one or two months' assessment)
    • Financial Reporting:
    • Contributed Capital

    • Income Tax Treatment:
    • Revenue (Amounts paid by members in expectation for the “right and
    • privilege of obtaining services” are income to the association under United Grocers v. U.S.A.)
  5. Property purchased by members with social or other funds and donated to the CIRA
    • Financial Reporting:
    • Contributed Capital

    • Income tax Treatment:
    • Contributed Capital
  6. Assessments for specific capital improvements or the replacement of personal property
    • Financial Reporting:
    • Revenue
    • unless the related expenditures have not been incurred, in which case
    • the assessments would be recorded as deferred revenue

    • Income Tax Treatment:
    • Contributed Capital
  7. Litigation proceeds from developers for warranty claims
    • Financial Reporting:
    • Revenue

    • Income Tax Treatment:
    • Contributed Capital
  8. Contingency reserves
    • Financial Reporting:
    • Revenue

    • Income tax Treatment:
    • Revenue
  9. Expenditures for major repair or replacement of real property common areas related to membership activities
    • Financial Reporting:
    • Generally not Captialized

    • Income tax treatment:
    • Not capitalized or deducted
  10. Expenditures for major repair or replacement of real property common areas related to nonmembership activities
    • Fiancial Reporting:
    • Capitalize and Depreciate

    • Income Tax Treatment:
    • Capitalize and Depreciate
  11. Expenditures for personal property acquired in connection with membership activities
    • Financial Reporting:
    • Capitalize and Depreciate

    • Income tax treatment:
    • Capitalize and depreciate under industry practice (See paragraph 501.83.)
  12. Expenditures for personal property acquired in connection with nonmembership activities
    • Financial Reporting:
    • Capitalize and depreciate

    • Income Tax Treatment:
    • Capitalize and depreciate
Author
Kshowalter
ID
44779
Card Set
Appendix 5C
Description
Treatment of Specific Transactions for Financial and Tax Purposes
Updated

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