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Death and Taxes: A Primer on Managing Your Hall Association

Tips for Maintaining the Hall’s Financial Health

Your December checklist

For your Trestleboard

Find it on freemason.org

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Death and Taxes: A Primer on Managing Your Hall Association

They’re the only guarantees that life offers, as they saying goes. And for Michael Vickerman, past master of Antioch Brentwood Lodge No. 175, they go hand-in-hand. “Taxes bore me to death,” Vickerman says with a laugh. A truck driver by trade, in 2010 Vickerman found himself taking over as treasurer of the lodge’s hall association out of necessity—and almost immediately faced with a very big problem.

Without any formal financial training and staring down the barrel of a crippling tax debt, Vickerman was forced to learn on the fly and familiarize himself with the growing suite of centralized services available to hall associations. Despite his own misgivings and years of neglect, Vickerman was—with significant help from Grand Lodge staff—ultimately able to fend off Uncle Sam and put the hall’s house back in order.

Righting the Ship

Just a few months after taking over as hall association treasurer, Vickerman received a threatening letter from the IRS—a sure sign that all was not right. It was a bill for unpaid taxes going back several years. It turns out that the Antioch Brentwood Hall Association hadn’t been filing taxes or even communicating with the IRS for years. In the interim, the State Franchise Tax Board had revoked the association’s 501(c)3 tax status, which meant that the meager revenue produced by the retail spaces on the ground floor of the lodge building were now fully taxable as income.

Already, the lodge had been subsidizing the hall association’s budget and helping pay its monthly utility bills. The loss of its tax-exempt status made the association an even greater burden—one that threatened to sink the lodge into bankruptcy. Acting quickly, Vickerman gathered as many of the association’s financial records as he could find and took his problem to a tax preparer. Unfortunately, rather than helping the situation, the preparer misfiled the association’s taxes, compounding an already dire problem. “That’s when I approached the Grand Lodge,” Vickerman says. “And it was like a light went on.”

At the time, the Grand Lodge financial services team was just beginning to roll out its financial reporting and bookkeeping program, Intacct. And so over the next two years, Vickerman worked with staff to import the hall association’s financial records into the new system. “Each year, staff helped file our taxes and establish a history of filings, which was important in our effort to recover our tax-exempt status,” Vickerman says. Meanwhile, he attended the secretaries and treasurer retreats and gained confidence in his growing bookkeeping skills.

Finally, in early 2019, Vickerman received the letter he’d been working toward: notification from the California State Franchise Tax Board that the Antioch Brentwood Hall Association had recovered its tax-exempt status. All told, Grand Lodge’s financial services team was able to reduce the hall association’s tax obligation from nearly $2,000 to just $800. And in so doing, Vickerman had finally squared the association’s finances and established a method for managing it into the future. “If a truck driver can do it,” Vickerman says, “anyone can.”

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Tips for Maintaining the Hall’s Financial Health

The hall is often your lodge’s most valuable asset. Here are suggestions to make the most of it—and avoid costly mistakes.

Multi-year Maintenance Plan
Putting off maintenance can become very expensive if emergency repairs are needed. Create a multi-year maintenance plan for the hall and stick to it. Remember to:

  • Include all necessary maintenance activities, their frequency, and their estimated costs—from pest control to gutter cleaning to roof repair.
  • Account for escalating costs due to the age of the building, seasonal conditions, or tenant needs.
  • Plan ahead for necessary inspections, including their costs and how frequently they’re required.
  • Estimate an allowance for reactive and unexpected maintenance.
  • Questions? Contact Grand Lodge Real Estate Services team.

Rentals

  • Consider adding retail tenants to storefront space, if applicable.
  • Look into renting the hall to other lodges, concordant bodies, schools, churches, and community groups.
  • Contact the local chamber of commerce to advertise availability for limited, periodic rentals such as focus groups, dance classes, off-site training, and parties.
  • Use peerspace.com and rentals.com to list and rent space on an hourly or daily basis
  • Calculate your minimum operating cost: Average three years’ worth of operating expenses to find the average yearly operating cost. Divide that by 365 to find the average daily cost. Divide by the property’s square footage to find the average daily per-square-foot cost. To find your minimum operating cost, multiply the daily per-square-foot cost by the square footage being rented and the time frame.
  • Determine fair market rental value: Benchmark your rental rate against comparable buildings in the community such as community centers, libraries, senior centers, churches, and event venues. (Brokers will often provide market info for free.)
  • Questions? Contact Grand Lodge Real Estate Services team.

Taxes

    The costliest mistake possible for a hall association is losing your tax-exempt status with the IRS—so ensure that you’re filing all taxes promptly and accurately. Have an accountant prepare or check your forms, or consider Grand Lodge services like Intacct and tax preparation.

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Your December Checklist

Stay on track of lodge business and prepare for important deadlines. Here’s your December checklist.


Executive Committee


Senior Warden, along with Executive Committee

  • Urge presumptive master, wardens, and senior deacon to perform their Master Mason’s proficiency soon, if not already completed.
  • Prepare 2020 budget to present to the lodge in January..
  • Budget for, and prepare to attend, 2020 leadership retreats, specifically the Hall Association Boot Camp at the Secretary and Treasurer Retreats.
  • Ensure that all committee assignments have been determined. After installation as master, confirm Audit, Charity, and Membership Retention Committee appointments
  • Review all candidates’ progress toward advancement.

Secretary

  • Continue sending out dues notices and collecting member dues.
  • Begin preparing secretary’s annual report to present to the lodge in February.
  • Review the list of suspended members sent to you by Grand Lodge and determine if your lodge wants to participate in the Restoration Campaign.
  • Budget for, and prepare to attend, 2020 leadership retreats, specifically the Hall Association Boot Camp at the Secretary and Treasurer Retreats.

Treasurer

  • Begin preparing treasurer’s annual report to present to the lodge in February.
  • Budget for, and prepare to attend, 2020 leadership retreats, specifically the Hall Association Boot Camp at the Secretary and Treasurer Retreats.

Questions? Contact Member Services at memberservices@freemason.org or (415) 776-7000.

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For Your Trestleboard

Registration for the UCLA International Conference on Freemasonry is now open! Make sure your members don’t miss it. Also, check out Masonic Gold, the beautiful new coffee table book on the history and development of 20 Gold Country lodges is available for purchase. These make great installation or holiday gifts. Download this ad for the UCLA conference and the Gold Country book.

This month:
UCLA International Conference on Freemasonry
Masonic Gold: Masonry in California’s Mother Lode

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Find it on Freemason.org

You have access to all of the annual proceedings of Grand Lodge since 1850. Take a look at past speeches, records, and figures—all available on the Member Center at freemason.org, under Member Center –> Publications –> Proceedings.

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Question of the Month

Last month we asked how you remained in touch with Masonic widows. Of those that responded

  • 56% - Through other members
  • 44% -By calling them
  • 22% - By visiting them
  • 61% - Other Answers


Here's your next question.

 

 



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