CAI-NJ July 2019 Newest

CLUBS... from page 18.

From the standpoint of an association, the follow- ing best practices are recommended: 1. Maintain a list of all active independent clubs 2. Require all clubs to submit, on an annual basis, a. Documents of incorporation (should include the clubs legal name, current bylaws, and membership list) b. Certificate of insurance (the association should be named within the policy as an additional party insured) c. Annual financial report d. Written certification from the club board indicating that they are in compliance with all laws and regulations Tax Implications: When clubs operate as separate legal entities, they face the same tax implications as any other incorporated organization. The two main issues deal with income taxes and sales tax. With respect to income taxes, any dues, ticket sales,

“Any concerns can easily be put to rest by instituting a set of procedures and controls...”

© iStockphoto.com

fundraising efforts, etc. brought in by the club are required to be reported to the Internal Revenue Service (IRS) and may be taxable. The IRS does provide a tax-exempt status to certain entities deemed to operate as “social clubs”, however, that status is not automatically granted. Clubs must meet a specific list of criteria and file an application with the IRS. Even if this status is granted, the club still may be taxed on certain profit motivated income. In addition, although certain tax exemptions may apply, the club will

We’ve got you covered! SPECIALIZING IN CONDOMINIUM AND TOWN HOME COMMUNITIES... gutters • Leaders • gutter guards CALL TOLL-FREE 877-833-8844 Fax: 732-833-8008 E-mail: njguttermaster@optonline.net FRIENDS & MEMBERS OF:

NJ LIC. # 13VH02643700

WWW.NJGUTTERMASTER.COM

44

J U L Y , 2 0 1 9