[lolitaQ]

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im wondering whether an hoa that collects fines shuold count those as revenue? are they taxable? do you deposit the monies in the operating account?

[cherylyrehc]

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It’s not counted as revenue because the HOA doesn’t EARN them. Fines are punitive and used as a way to enforce the rules and discourage violations. Your HOA should never rely on fines as a source of income.

[lolitaQ]

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i didnt say we were gonna rely on fines as revenue… just that do they count as revenue?

[enginecore]

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Yes, fines should be deposited into the operating account of your HOA. They work just like assessments that way. You can treat them as revenue and use them to pay for your HOA’s expenses. If you happen to have a surplus because you collected a lot of fines this year, you can carry them over to the next year’s budget.

[lolitaQ]

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thank you for your reply but are fines taxable?

[ollieoxen]

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Our HOA pays taxes on fines but not much. Membership assessments are usually not taxable but fines count as other profit. Don’t worry – they will not affect the nonprofit status of your HOA.

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