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About Harvey Mechanic
Expertise
US 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 questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. To search my previous answers you can do a Google search:
site:allexperts.com/q/nonprofit
[with your other search terms appended].

Experience
I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.

Education/Credentials
B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude

You are here: Experts > Real Estate > Tax Planning: U.S. > Nonprofit Law > 501c3

Nonprofit Law - 501c3

Expert: Harvey Mechanic - 10/22/2009

Question
DreamKatcher Ranches Inc. a 501c3 a therapeutic and hippo therapy ranch for children. We are going to build a indoor multi-purpose arena, whereby we have events such as concerts, farm shows, etc. My question is monies generated from ticket sales,are we allowed to own a facility to generate cash flow to run and operate the ranches as long all proceeds are deposited into Dreamkatcher? Secondly,would we or can a 501c3 pay taxes to the city on ticket sales.

Thank you

Steve

Answer
I have in my profile that this free forum is only for relevant IRS federal exemption issues of 501(c)(3) organizations and not as to unrelated business activities. At this time, from the meager details that you have presented I would not be able to inform you whether the new activities are unrelated business activities. See IRS Publication 598 "Tax on Unrelated Business Income of Exempt
Organizations" at
www.irs.gov/pub/irs-pdf/p598.pdf
explains that such activities are generally taxable.

If the activities are not, at all unrelated business activities, then the proceeds may be used to operate a 501(c)(3) organization. I would be willing to work on your matter, but I would need to spend a substantial amount of time and that would be beyond the scope of this free forum to analyze whether the activities are unrelated business. . If you want to hire me for such work, please contact me directly to the email address below.

As for the ticket sales taxes, that issue is controlled by state and city law and jurisdictions may differ somewhat with how they would treat such issues. I suggest you contact the city directly if you are referring to city taxes. As for general state sales taxes, that would be a state office.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

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