Can I take tax deductions on rental property HOA fees AND mandatory community HOA fees?
So I own this condo that I'm renting out, and I've got two different types of fees I'm trying to figure out for my taxes. First, there's the regular HOA fee for the condo complex itself - that's about $295 a month. But then there's also this mandatory community fee of $175 quarterly that all property owners in the development have to pay regardless of whether they own a condo, townhouse, or single family home. The community fee covers things like the neighborhood pool, walking trails, and some landscaping in common areas. The condo HOA covers building maintenance, hallway cleaning, etc. I know the rental property HOA fees are deductible as a rental expense, but I'm confused about these mandatory community fees. Do those also count as deductible expenses for a rental property? Or are they treated differently for some reason? I've been renting this place out for about 2 years now and just realized I might have been missing out on some deductions. I charge my tenant $1,700/month which barely covers my mortgage, regular HOA, and property taxes, so every deduction helps!
18 comments
Join the conversation
Owen Devar
Yes, both your condo HOA fees AND the mandatory community fees would typically be deductible as rental expenses! When you own a rental property, pretty much any required fees that go toward maintaining the property or providing services to that property can be deducted as business expenses. The key question isn't what type of fee it is, but whether it's an ordinary and necessary expense related to your rental business. Since both fees are mandatory and are connected to your rental property, they both should qualify as legitimate business expenses. Make sure you're keeping good records of these payments. And if you haven't been deducting the community fees in past years, you might want to look into filing amended returns (Form 1040-X) for the open tax years if the deduction amount would make a significant difference.
0 coins
Brooklyn Knight
•Thanks for the info! Do you know if there's a specific line or schedule where I should put these different fees? Should I lump them together as one "HOA fee" expense or list them separately? And for the amended returns, how far back can I go to claim these missed deductions?
0 coins
Owen Devar
•For rental properties, you'll report all your income and expenses on Schedule E. Both types of HOA fees would typically go on Line 19 "Other expenses" - you can either combine them and label as "HOA fees" or list them separately as "Condo HOA" and "Community fees" for clarity. For amended returns, you can generally go back three years from the date you filed your original return. So if you filed your 2022 return in April 2023, you have until April 2026 to amend it. Just keep in mind that if the difference is small, the filing fee and effort might not be worth it.
0 coins
Daniel Rivera
I was in a similar situation last year with my rental townhouse. I discovered taxr.ai (https://taxr.ai) after my accountant gave me conflicting advice about community assessments vs regular HOA fees. Their system analyzed my HOA documents and clearly identified which parts were deductible for my rental. Seriously was a game changer because it turns out both types of fees were 100% deductible in my case - saved me almost $800 in taxes I would've otherwise paid!
0 coins
Sophie Footman
•How exactly does that work? Do you just upload your HOA statements and they tell you what's deductible? My property has weird special assessments too and I'm never sure how to handle those.
0 coins
Connor Rupert
•Sounds interesting but I'm skeptical. Couldn't you just ask your CPA about this? Why would you need a special service to figure out HOA deductions which seem pretty straightforward?
0 coins
Daniel Rivera
•You just upload your HOA statements, community fee documentation, or even emails about special assessments, and their system breaks it all down. It explains which portions are immediately deductible as expenses versus what might need to be capitalized or treated differently. They also explain why, which helped me understand the rules better. The advantage over just asking a CPA is getting detailed documentation backing up your position if you're ever audited. My accountant was actually confused about how to handle some community-wide special assessments that weren't specifically for my unit, and taxr.ai cleared that up completely.
0 coins
Connor Rupert
I was wrong about this being straightforward! I tried taxr.ai after my initial skepticism and it actually found some interesting distinctions in my situation. My community has both monthly fees and quarterly assessments, and it turns out the assessments were partly for capital improvements that should have been depreciated rather than fully expensed. Would never have caught that myself, and my previous tax guy had been doing it wrong for years. The service literally paid for itself in the first 15 minutes.
0 coins
Molly Hansen
If you need help from the IRS on this HOA question, good luck getting through to them! I spent 3 weeks trying to get clarification on rental property deductions. Finally used Claimyr (https://claimyr.com) and they got me talking to an actual IRS rep in less than 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that both regular HOA and community HOA fees are fully deductible for rental properties as ordinary business expenses on Schedule E. She also mentioned that if you haven't been taking the deduction for the community fees, you should definitely consider amending previous returns if the amounts are significant.
0 coins
Brady Clean
•Wait, how does this work? Is it just like a service that waits on hold for you? Seems weird that something like this would even need to exist...
0 coins
Skylar Neal
•Yeah right. Nobody gets through to the IRS in 20 minutes even with a service. I've been trying since February to talk to someone about my rental property questions. What's the catch here?
0 coins
Molly Hansen
•It's basically a service that navigates the IRS phone system and waits on hold for you. Once they get someone on the line, they call you and connect you directly to the IRS agent. No more spending hours with your phone on speaker waiting for someone to pick up. There's no catch - it really works! They use some technology to stay in the IRS phone queue so you don't have to. The longest part is just receiving the callback once they have an agent on the line. Even with my complicated rental property questions, I got clear answers in a single call instead of the multiple attempts I was making on my own.
0 coins
Skylar Neal
I'm eating my words here. After being totally skeptical about Claimyr, I tried it yesterday out of desperation (been trying to clarify some rental deduction rules for months). Got connected to an IRS tax specialist in about 35 minutes! The agent confirmed that both regular HOA and these community fees are 100% deductible for rental properties, AND they helped me figure out how to handle some special assessments that came up last year. Worth every penny just for the time saved not being on hold for hours.
0 coins
Vincent Bimbach
Don't forget to check if any portion of either HOA fee goes toward things that should be capitalized rather than deducted immediately! For example, if part of your fees went toward a new roof for the building or major renovations, those portions might need to be depreciated over the useful life of the improvement rather than deducted fully in the current year.
0 coins
Brooklyn Knight
•That's a good point I hadn't considered. How would I know which parts of the fees might need to be capitalized? The HOA sends financial statements but they don't break down exactly how every dollar is spent.
0 coins
Vincent Bimbach
•You should request the detailed financial statements from your HOA, which they're usually required to provide to owners. Look for line items labeled as "reserves," "capital improvements," or "replacement funds." These are the portions that might need to be capitalized. If your HOA isn't transparent about this, you could reasonably estimate based on your monthly statements and any announcements about major projects. For example, if they announced a $100,000 roof replacement and there are 50 units, you might allocate $2,000 of your annual fees toward a capital expense that would be depreciated over the roof's useful life (typically 27.5 years for residential rental property) rather than deducted immediately.
0 coins
Kelsey Chin
Has anyone used TurboTax for reporting these HOA fees for rental properties? I'm trying to figure out where exactly to enter the community fees vs regular HOA fees in their system.
0 coins
Norah Quay
•In TurboTax, when you get to the rental property section, there's an "Expenses" category. Look for "Homeowner Association Dues" as a specific line item - that's where you can put both types of fees combined. If you want to separate them, you can use the "Other Expenses" category and create two separate line items.
0 coins