AboutHarvey 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
Question i'm trying to determine the pros and cons (i.e. taxes, K/tort liablity, control, etc) of buying land that will be primarily- probably exclusively- used by a 501(c)(3). Specifically looking for the right entity/biz org structure to buy/hold the lot. Should the charity make the purchase directly, or lease it from another entity that holds title?
Answer Well, you would need to look at all of the factors. I have in my profile that this free forum is only for relevant IRS federal exemption issues of 501(c)(3) organizations. As for those IRS issues, see page 9 of
www.irs.gov/pub/irs-pdf/p598.pdf wherein we see "Rents from real
property... are excluded in computing unrelated business taxable
income." However, see pages 14-19 on Unrelated debt-financed
property. There you will see that, if there has been recently
debt-financing (like a mortgate) rents are, at least to some
extent, unrelated business taxable income.
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."
I would be willing to work on your matter as to the other issue, but I would need to spend a substantial amount of time and that would be beyond the scope of this free forum. If you want to hire me for such work, please contact me directly to the email address below.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
