AboutHarvey Mechanic Expertise Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer question about Nonprofit's Unrelated Business or how to fill out forms. This forum is only for legal questions about a specific nonprofit asked by members or those otherwise directly effected by the specific nonprofit organization.
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Expert: Harvey Mechanic Date: 7/18/2008 Subject: Non Profit Senior Center
Question Hi HM,
Thanks for you time! Our question is....is it possible for the Non profit Senior Center next door to rent the Dr. a room for him to teach a class for his patients? And yes, the seniors can take the class also. Can or does it fall under the qid pro quo? or......?
Answer Please read pages 14-19 on Unrelated debt-financed property.
www.irs.gov/pub/irs-pdf/p598.pdf
If there is no debt-financing (like a mortgate) rents are excluded
from computing unrelated business taxable income -- page 9
Note from page 16 "If substantially all (85% or more) of the use of
any property is substantially related to an organization's exempt
purposes, the property is not treated as debt-financed property."
The Medical doctor should pay at least market rent.
Harvey Mechanic
Attorney At Law
Harvey108@hotmail.com
