[Code of Federal Regulations]
[Title 26, Volume 7]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.528-7]

[Page 238-239]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.528-7  Inurement.

    An organization is not a homeowners association if any part of its 
net earnings inures (other than as a direct result of its engaging in 
one or more exempt functions) to the benefit of any private person. 
Thus, to the extent that members receive a benefit from the general 
maintenance, etc., of association property, this benefit generally would 
not constitute inurement. If an organization pays rebates from amounts 
other than exempt function income, such rebates will constitute 
inurement. In general, in determining whether an organization is in 
violation of this section, the principles used in

[[Page 239]]

making similar determinations under Section 501(c) will be applied.

[T.D. 7692, 45 FR 26323, Apr. 18, 1980]