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Nonprofit Law/990ez schedule N dissolution

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Question
We are a Non profit and one of our projects became its own 501c3 with its own EIN, and I am wondering how to report the assets that went with the project. 990ez line 20 states Other changes in net assets or fund balances explain in schedule O...however line 36 Part V states Did the organization undergo a liquidation, termination, dissolution, or significant disposition of net assets during the year? if yes, complete schedule N

Does line 36 describe this situation or is line 20 and schedule O the correct place to report the change in assets from year prior?

Answer
Links to Form 990-Ez is through:
http://www.irs.gov/pub/irs-pdf/f990ez.pdf
and the instructions at:
http://www.irs.gov/pub/irs-pdf/i990ez.pdf
and, on the right column of page 18 of those instructions we see:
--- Start of Excerpt ---
A significant disposition of net assets is a sale, exchange,
disposition or other transfer of more than 25% of the FMV of the
organizationís net assets during the year, regardless of whether
the organization received full or adequate consideration. A
significant disposition of net assets may result from either an
expansion or contraction of operations.
---End of Excerpt---

You did not explain whether the disposition of net assets was more than that 25% figure, but, if it was, you would need to complete that Schedule N (as well as the Schedule O).

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

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

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


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