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We use Facilities 7 to prepare all our reserve studies for our association and other clients, and provide you with access at the completion of the reserve study. Facilities 7 is an internet-based software system that allows you to keep your reserve management plan up to date. It is the most powerful RS software available, and meets the standards of the ICCBI (International Capital Budgeting institute).
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This is because the homeowners association industry thinks in terms of operating funds and reserve funds. However, the IRS thinks in terms of operating funds and CAPITAL funds. To the IRS, capital funds are the large expenditures of funds that are typically described as major repairs or replacements, expenditures that add to the original life of the asset (component). The biggest problem for associations is painting expense. The industry lumps these costs into reserves as part of the reserve fund study. You have probably heard someone within the industry say that an association "cannot have painting in reserves because of IRS rules. " If the association files Form 1120-H, there is no tax issue with respect to painting.
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Accordingly, they are usually more complex than associations consisting of single family homes where the association does not have responsibility for the maintenance of building exteriors. The reserve professional must be familiar with a wide variety of building components and their normal major repair or replacement cycles. The purpose of accumulating condo association reserves is to provide sufficient funds at the time the major repairs or replacements must be made. However, many factors can affect the normal repair or replacement cycle of components, causing them to either wear out sooner than expected, or to last longer than expected. As a result, the condo reserve fund becomes an estimate. An example of this is looking at one of the most common roofing types in the United States, the three tab asphalt shingle roof. Search Sex Offender Around you Before They violate Society.
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Printing Press Organization. Home Health Software. Why It's Important To Know, What Is A Reserve Study All About? Current Industry Status of the Reserve Study (RS) Process Many within the industry fail to recognize that the Reserve Study is simply a form of a long-term capital budget. Current industry standards based on a once-every-three-years site visit and a static, paper report will continue to result in failure to meet expectations. The current process used by the industry contains so many disconnects that it is not surprising that special assessments are somewhat commonplace, even where RS reports have been prepared annually. Even where associations use Reserve Study software to provide more current information, software limitations prevent the creation of an effective knowledge based system.
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