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June 22, 2009
Bldg that hasn't filed taxes
Hello. I am interested in buying a condo in a small building. In reviewing the financials, my lawyer found that the building hasn't filed taxes since its inception a few years ago. He said they will need to file but the penalty will be waived and that no taxes are due. Of course I am now dubious about this. The lawyer also said this is quite common--for small buildings not to file taxes. Please advise. I don't want to buy into a building with problems. PS The treasurer of the building is reportedly talking to an accountant.
Comments
Condominium associations normally file 1120 H for the federal return. Although there is usually no liability on the federal return, the state and City require you to file as well. For NY State, it is Sec 9A franchise tax, and even if no federal tax is due, you still have to pay a minimum tax due. This goes as well for the City General Corporation Tax. The fixed minimum tax for the City is $300, regardless if you had income for federal purposes. The City and State will impose interest and penalties on the taxes due, I can guarantee you that. Whether they can get them to waive them is another story.
The condominium's accountant should have been aware of this.
Posted by: Bklyn born at June 22, 2009 2:48 PM
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