§ 528. Certain homeowners associations

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1976

   Pub. L. 94–455 title XXI § 2101(a) · 90 Stat. 1520

   Enacted · 26 U.S.C. § 528

   Added Pub. L. 94–455, title XXI, § 2101(a), Oct. 4, 1976, 90 Stat. 1897

   Source evidence

   Code source credit
   Added Pub. L. 94–455, title XXI, § 2101(a), Oct. 4, 1976, 90 Stat. 1897

   Enacted provision · exact public law section
   (a) General Rule.— Subchapter F of chapter 1 (relating to exempt organizations) is amended by adding at the end thereof the following new part: “PART VII— CERTAIN HOMEOWNERS ASSOCIATIONS “Sec. 528. Certain homeowners associations. “SEC. 528. CERTAIN HOMEOWNERS ASSOCIATIONS. “(a) General Rule.— A homeowners association (as defined in subsection (c)) shall be subject to taxation under this subtitle only to the extent provided in this section. A homeowners association shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes. “(b) Tax Imposed.— “(1) In general.— A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall consist of a normal tax and surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income 26 USC 11. Ante, p, 1606. referred to in section 11. For purposes of this subsection, the sur-tax exemption provided by section 11(d) shall not be allowed. “(2) Alternative tax in case of capital gains.— If for any taxable year any homeowners association has a net capital gain, then in lieu of the tax imposed by paragraph (1), there is hereby imposed a tax (if such tax is less that the tax imposed by paragraph (1)) which shall consist of the sum of— “(A) a partial tax, computed as provided by paragraph (1), on the homeowners association taxable income determined by reducing such income by the amount of such gain, and “(B) a tax of 30 percent of such gain. “(c) Homeowners Association Defined.— For purposes of this section— “(1) Homeowners association.— The term ‘homeowners association means an organization which is a condominium management association or a residential real estate management association if— “(A) such organization is organized and operated to provide for the acquisition, construction, management, maintenance, and care of association property, “(B) 60 percent or more of the gross income of such organization for the taxable year consists solely of amounts received as membership dues, fees, or assessments from— “(i) owners of residential units in the case of a condominium management association, or “(ii) owners of residences or residential lots in the case of a residential real estate management association. “(C) 90 percent or more of the expenditures of the organization for the taxable year are. expenditures for the acquisition, construction, management, maintenance, and care of association property, “(D) no part of the net earnings of such organization inures (other than by acquiring, constructing, or providing management, maintenance, and care of association property, and other than by a rebate of excess membership dues, fees, or assessments) to the benefit of any private shareholder or individual, and “(E) such organization elects (at such time and in such manner as the Secretary by regulations prescribes) to have this section apply for the taxable year. “(2) Condominium management association.— The term ‘condominium management association’ means any organization meeting the requirement of subparagraph (A) of paragraph (1) with respect to a condominium project substantially all of the units of which are used as residences. “(3) Residential real estate management association.— The term ‘residential real estate management association’ means any organization meeting the requirements of subparagraph (A) of paragraph (1) with respect to a subdivision, development, or similar area substantially all the lots or buildings of which may only be used by individuals for residences. “(4) Association property.— The term ‘association property’ means— “(A) property held by the organization, “(B) property commonly held by the members of the organization, _ “(C) property within the organization privately held by the members of the organization, and “(D) property owned by a governmental unit and used for the benefit of residents of such unit. “(d) Homeowners Association Taxable Income Defined.— “(1) Taxable income defined.— For purposes of this section, the homeowners association taxable income of any organization for any taxable year is an amount equal to the excess (if any) of— “(A) the gross income for the taxable year (excluding any exempt function income), over “(B) the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income), computed with the modifications provided in paragraph (2). “(2) Modifications.— For purposes of this subsection— “(A) there shall be allowed a specific deduction of $100, “(B) no net operating loss deduction shall be allowed under section 172, and “(C) no deduction shall be allowed under part VIII of subchapter B (relating to special deductions for corporations). “(3) Exempt function income.— For purposes of this subsection, the term ‘exempt, function income’ means any amount received as membership dues, fees, or assessments from— “(A) owners of condominium housing units in the case of a condominium management association, or “(B) owners of real property in the case of a residential real estate management association.”

2. 1978

   Pub. L. 95–600 § 301(b)(7) · 92 Stat. 2763

   1. Substituted · 26 U.S.C. § 528(b)(1)

      Pub. L. 95–600, § 301(b)(7), substituted “Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b)” for “Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income referred to in section 11”

   2. Struck · 26 U.S.C. § 528(b)(1)

      Pub. L. 95–600, § 301(b)(7), struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 95–600, § 301(b)(7), substituted “Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b)” for “Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income referred to in section 11” and struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed.

   Enacted provision · exact public law section
   (7) Homeowners associations.— Paragraph (1) of section 528(b) (relating to tax imposed) is amended to read as follows: 26 USC 528. “(1) In general.— A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b).”

3. 1978

   Pub. L. 95–600 § 403(c)(2) · 92 Stat. 2763

   Substituted · 26 U.S.C. § 528(b)(2)(B)

   Pub. L. 95–600, § 403(c)(2), substituted provision related to amount being determined according to section 1201(a) for provision requiring an amount of 30 percent

   Source evidence

   Code amendment note
   Subsec. (b)(2)(B). Pub. L. 95–600, § 403(c)(2), substituted provision related to amount being determined according to section 1201(a) for provision requiring an amount of 30 percent.

   Enacted provision · exact public law section
   (2) 26 USC 528. Subparagraph (B) of section 528(b)(2) (relating to tax imposed on certain homeowners associations) is amended to read as follows: “(B) Supra. an amount determined as provided in section 1201(a) on such gain.”

4. 1978

   Pub. L. 95–600 § 701(n)(1) · 92 Stat. 2763

   Substituted · 26 U.S.C. § 528(c)(2)

   Pub. L. 95–600, § 701(n)(1), substituted “by individuals for residences” for “as residences”

   Source evidence

   Code amendment note
   Subsec. (c)(2). Pub. L. 95–600, § 701(n)(1), substituted “by individuals for residences” for “as residences”.

   Enacted provision · exact public law section
   (1) In general.— Paragraph (2) of section 528(c) (defining 26 USC 528. condominium management association) is amended by striking out “as residences” and inserting in lieu thereof “by individuals for residences”.

5. 1980

   Pub. L. 96–605 title I § 105(a) · 94 Stat. 3521

   1. Substituted · 26 U.S.C. § 528(b)

      Pub. L. 96–605 substituted provision that all income of a homeowners association be taxed at a rate of 30 per cent for provision that all income of a homeowners association be taxed a sum computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b) of this title

   2. Struck · 26 U.S.C. § 528(b)

      Pub. L. 96–605 struck out provision providing for alternative tax in case of capital gains

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 96–605 substituted provision that all income of a homeowners association be taxed at a rate of 30 per cent for provision that all income of a homeowners association be taxed a sum computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b) of this title and struck out provision providing for alternative tax in case of capital gains.

   Enacted provision · exact public law section
   (a) General Rule.— Subsection (b) of section 528 (relating to tax 26 USC 528. imposed with respect to certain homeowners associations) is amended to read as follows: “(b) Tax Imposed.— A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall be equal to 30 percent of the homeowners association taxable income.”.

6. 1997

   Pub. L. 105–34 § 966(d) · 111 Stat. 788

   Inserted · 26 U.S.C. § 528(b)

   Pub. L. 105–34, § 966(d), which directed amendment of subsec. (b) by inserting before the period “(32 percent of such income in the case of a timeshare association)”, was executed by making the insertion before the period at end to reflect the probable intent of Congress

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 105–34, § 966(d), which directed amendment of subsec. (b) by inserting before the period “(32 percent of such income in the case of a timeshare association)”, was executed by making the insertion before the period at end to reflect the probable intent of Congress.

   Enacted provision · exact public law section
   (d) Rate of Tax.— Subsection (b) of section 528 (relating to certain homeowners associations) is amended by inserting before the period “(32 percent of such income in the case of a timeshare association)”.

   Effective date note
   Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

7. 1997

   Pub. L. 105–34 § 966(a)(1)(A) · 111 Stat. 788

   Substituted · 26 U.S.C. § 528(c)(1)

   Pub. L. 105–34, § 966(a)(1)(A), substituted “, a residential real estate management association, or a timeshare association” for “or a residential real estate management association” in introductory provisions

   Source evidence

   Code amendment note
   Subsec. (c)(1). Pub. L. 105–34, § 966(a)(1)(A), substituted “, a residential real estate management association, or a timeshare association” for “or a residential real estate management association” in introductory provisions.

   Enacted provision · exact public law section
   (A) by striking “or a residential real estate management association” and inserting a residential real estate management association, or a timeshare association” in the material preceding subparagraph (A),

   Effective date note
   Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

8. 1997

   Pub. L. 105–34 § 966(a)(1)(B) · 111 Stat. 788

   Added · 26 U.S.C. § 528(c)(1)(B)(iii)

   Pub. L. 105–34, § 966(a)(1)(B), added cl. (iii)

   Source evidence

   Code amendment note
   Subsec. (c)(1)(B)(iii). Pub. L. 105–34, § 966(a)(1)(B), added cl. (iii).

   Enacted provision · exact public law section
   (B) by striking “or” at the end of clause (i) of subparagraph (B), by striking the period at the end of clause (ii) of subparagraph (B) and inserting “, or”, and by adding at the end of subparagraph (B) the following new clause: “(iii) owners of timeshare rights to use, or timeshare ownership interests in, association property in the case of a timeshare association,”, and

   Effective date note
   Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

9. 1997

   Pub. L. 105–34 § 966(a)(1)(C) · 111 Stat. 788

   Inserted · 26 U.S.C. § 528(c)(1)(C)

   Pub. L. 105–34, § 966(a)(1)(C), inserted before comma at end “and, in the case of a timeshare association, for activities provided to or on behalf of members of the association”

   Source evidence

   Code amendment note
   Subsec. (c)(1)(C). Pub. L. 105–34, § 966(a)(1)(C), inserted before comma at end “and, in the case of a timeshare association, for activities provided to or on behalf of members of the association”.

   Enacted provision · exact public law section
   (C) by inserting “and, in the case of a timeshare association, for activities provided to or on behalf of members of the association” before the comma at the end of subparagraph (C).

   Effective date note
   Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

10. 1997

    Pub. L. 105–34 § 966(a)(2) · 111 Stat. 788

    Redesignated · 26 U.S.C. § 528(c)(4)

    Pub. L. 105–34, § 966(a)(2), added par. (4). Former par. (4) redesignated (5)

    Source evidence

    Code amendment note
    Subsec. (c)(4). Pub. L. 105–34, § 966(a)(2), added par. (4). Former par. (4) redesignated (5).

    Enacted provision · exact public law section
    (2) Timeshare association defined.— Subsection (c) of section 528 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: “(4) Timeshare association.— The term ‘timeshare association’ means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property.”.

    Effective date note
    Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

11. 1997

    Pub. L. 105–34 § 966(c) · 111 Stat. 788

    Inserted · 26 U.S.C. § 528(c)(5)

    Pub. L. 105–34, § 966(c), inserted concluding provisions “In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.”

    Source evidence

    Code amendment note
    Subsec. (c)(5). Pub. L. 105–34, § 966(c), inserted concluding provisions “In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.”

    Enacted provision · exact public law section
    (c) Association Property.— Paragraph (5) of section 528(c), as redesignated by subsection (a)(2), is amended by adding at the end the following new flush sentence: “In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.”.

    Effective date note
    Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

12. 1997

    Pub. L. 105–34 § 966(a)(2) · 111 Stat. 788

    Redesignated · 26 U.S.C. § 528(c)(5)

    Pub. L. 105–34, § 966(a)(2), redesignated par. (4) as (5)

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 105–34, § 966(a)(2), redesignated par. (4) as (5).

    Enacted provision · exact public law section
    (2) Timeshare association defined.— Subsection (c) of section 528 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: “(4) Timeshare association.— The term ‘timeshare association’ means any organization (other than a condominium management association) meeting the requirement of subparagraph (A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership interest in, real property constituting association property.”.

    Effective date note
    Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

13. 1997

    Pub. L. 105–34 § 966(b) · 111 Stat. 788

    Added · 26 U.S.C. § 528(d)(3)(C)

    Pub. L. 105–34, § 966(b), added subpar. (C)

    Source evidence

    Code amendment note
    Subsec. (d)(3)(C). Pub. L. 105–34, § 966(b), added subpar. (C).

    Enacted provision · exact public law section
    (b) Exempt Function Income.— Paragraph (3) of section 528(d) is amended by striking “or” at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting “, or”, and by adding at the end the following new subparagraph: “(C) owners of timeshare rights to use, or timeshare ownership interests in, real property in the case of a timeshare association.”.

    Effective date note
    Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

15 of 15 references resolved to an enrolled provision