Quote:
Originally Posted by ryeguy252
I know we have a few tax accountants on this board but we live in a townhouse (4 units) that are selfmanaged and realized we haven't filed taxes for the condo corp. I know we likely won't have to pay taxes and its relatively easy I believe to file taxes for the condo corp but seeing what the rates are like to back fill and file 2021-2024. Thanks!
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I've dealt with this from both the filing side (although no longer) and as an owner/self managed condo corp. Long story short, don't skimp on the financial information, especially if the board is relatively informal and only formally meets once or twice a year. It's not hard work but I'm kinda glad I don't have to touch that stuff anymore.
A T2/T1044 return is what the condo corp will need. You probably want an engagement with financial statements rather than one that is a tax return only (need financial paperwork for certain situations). That means at minimum a compilation engagement, not a T2/T1044 tax return only. We were OK for the first bit without the financial statements/cash flow statements, but later on we ended up paying to back fill the work to prepare the prior year stuff anyways.
Since you're back filling 2021-2024, you need to file VDP with CRA for 2021-2023 (maybe even 2024). You don't want penalties or the CRA suddenly deciding that the condo corp is a for profit entity vs a not for profit entity.
The other thing is that you are supposed to do a reserve fund study every 5 years to determine if condo fees are appropriate/enough is accumulated in the reserve fund to address major issues with the condo.
In the condo I used to own, we were aggressive and did 25% over the base estimate condo fee per the original study, but froze it for the 5 years so that we didn't have to screw around and figure out the new number later on/didn't have to worry as much in not having enough in the reserve fund for a surprise repair (ie: $200 vs $160 per month). By the time we did the next study 5 years later and the report recommended something like $210 in the coming year 6 to $280 by year 10, it was far easier again to just set it at like $280-300 per month fixed for the next 5 years. Those condo fee numbers were still significantly more comfortable than some of the other buildings that would randomly go from like $160-400 per month after the first 5 years and then $750 in year 11-15. Also, since it was self managed, everyone was kinda happier that a healthier reserve fund meant it would benefit at sale or anyone keeping the condo, it would get rid of any surprise special assessments. It had value for everyone later on. Everyone also loved the idea of knowing exactly what the condo fee would be rather than having to remember to change the number each calendar year.
Good luck.
