Has anyone had experience with how to properly log an HOA Special Assessment? Should be an HOA fee, repair, or a capital expense? Does it matter what the special assessment is being implemented for? For example,e there are some structural issues that are being repaired in this assemnet. Prior assessments have been roof repairs or a new roof.
Hi Scott - I think the category depends on the specific situation (i.e. will roof repairs significantly extend the life of the roof), but it probably makes sense to consult your CPA before making a final decision.
You may also refer to the IRS website [here](https://www.irs.gov/publications/p527#en_US_2020_publink1000219144), which states:
> Special rules apply if you rent your condominium to others. You can deduct as rental expenses all the expenses discussed in chapters 1 and 2. In addition, you can deduct any dues or assessments paid for maintenance of the common elements.
> You can’t deduct special assessments you pay to a condominium management corporation for improvements. However, you may be able to recover your share of the cost of any improvement by taking depreciation.
In case you’re not sure what to categorize as repairs vs. capital expenses, I’ve found the following link helpful:
Hope that helps.
Thanks Ravi,
I get this in the sense with a repair vs capital improvement. The challenge here is that the repair is not a direct cost, and it’s through the HOA.
Scott
@scott.longazel I’m not sure it matters that the funds were deployed through the HOA instead of directly. It appears that the ultimate purpose or use is what matters. Either way, Stessa is built to be flexible enough to handle different income and expense situations, but we do not provide specific tax advice. You’ll want to check with your CPA for more information about how to handle this scenario.