CAI-NJ Sep.2016

EXEMPT... from page 48.

1. It must serve a “community” which bears a reasonable recognizable relationship to an area ordinarily identified as governmental; 2. It must not conduct activities direct- ed to the exterior maintenance of private residences; and 3. The common areas or facilities it owns and maintains must be for the use and enjoyment of the gen- eral public. "The organization must be operated primarily for the purpose of bringing about

civic betterments and social improvements."

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In later rulings the IRS stated that: 1. “Community” does not embrace a minimum area or certain number of homeowners and 2. A homeowners’ association may not receive an exemption if it represents an area that isn’t a community and it restricts the use of its recreational facilities to only members of the association; In other words, based on the rul- ings, associations wouldn’t be consid- ered an exempt social welfare orga-

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