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Form 1120-H is U.S. Income Tax Return for Homeowners Associations. Item C is Total Expenditures made for purposes described in 90 percent expenditures test. At least 90 percent of the expenditures must involve expenses for acquiring, building, managing, maintaining, and caring for property. Current and capital expenditures are included. Not included are such items as investments or transfers of funds held to meet future costs.

Item D is Association's total expenditures for the tax year. This total also includes expenditures directly related to exempt function function. Item D is a total of expenditures.

But Item C is to show that the required percentage (90 percent) for expenditures in particular areas has been met.

For more information, go to www.irs.gov/formspubs for Instructions for Form 1120-H.

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