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You are here: Experts > Real Estate > Tax Planning: U.S. > Nonprofit Law > civic association
Expert: Harvey Mechanic
Date: 5/12/2008
Subject: civic association
Question
Our civic association has a building, land, and swimming pool. We are having a tough time meeting bills with low membership and would like to sell some of the land and/or building to continue to maintain the organization.. With our 501c 3, we want to be sure we can legally sell and keep the money to continue the civic association goals in our community.
Another thought was to lease or sublet to a business for daytime use in order to pay for utilities and upkeep.
Answer
This forum is only for federal tax questions regarding 501(c)(3) public charities as I have explained in my profile. The IRS does not mind if a 501(c)(3) organization selss some of its land or buildings to continue to maintain the organization. Please read pages 14-19 on Unrelated debt-financed property.
www.irs.gov/pub/irs-pdf/p598.pdf
which, if it applied, may indicate some taxes due after the sale.
Also, if there is no debt-financing (like a mortgate) rents are
excluded from computing unrelated business taxable income -- page
9.
Harvey Mechanic
Attorney At Law
Harvey108@hotmail.com
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