Code of Federal Regulations Title 26. Internal Revenue § 26.1.528–2 Organized and operated to provide for the acquisition, construction, management, maintenance and care of association property

(a) Organized and operated—(1) Organized.To be treated as a homeowners association an organization must be organized and operated primarily for the purpose of carrying on one or more of the exempt functions of a homeowners association. For the purposes of section 528 and these regulations, the exempt functions of a homeowners association are the acquisition, construction, management, maintenance, and care of association property. In determining whether an organization is organized and operated primarily to carry on one or more exempt functions, all the facts and circumstances of each case shall be considered. For example, when an organization provides in its articles of organization that its sole purpose is to carry on one or more exempt functions, in the absence of other relevant factors it will be considered to have met the organizational test. (The term articles of organization means the organization's corporate charter, trust instruments, articles of association or other instrument by which it is created.)

(2) Operated.An organization will be treated as being operated for the purpose of carrying on one or more of the exempt functions of a homeowners association if it meets the provisions of §§ 1.528–5 and 1.528–6.