Nonprofit Law/Sale of assets


A 501-c-3 operating a private school is closing.  Can the nonprofit org sell its school building and grounds to anyone who wants to buy, or does the nonprofit have to sell to another nonprofit?  The school has an outstanding loan that must be paid...the bldg is collateral on the loan.  I know the proceeds, after paying the loan, must be given to another nonprofit.  However, I thought the property could be sold to anyone.
Thanks!  Also, can you tell me where I can read up on nonprofits?

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations.  The IRS does not prohibit the sale of assets of a 501(c)(3) organization except if it is for less than the market value. But you issue is controlled more by state law and states may differ somewhat with how they would treat such issues. Even though this forum is not for such state law issues, I may be able to direct you.

I am assuming your organization is a Virginia Nonstock Corporations Act, but if my assumption is incorrect, let me know and I will reply further.  The law of such Nonstock Corporations is available at

I am assuming that the property is no larger than 1000 acres. As you wrote that the 501(c)(3) organization is closing, it appears that the organization is dissolving. Therefore, you would see 13.1-902 and the sections after that, as it deals with such dissolution and there is nothing there that requires the sale of real property to be to another nonprofit organization.

Harvey Mechanic, Attorney at Law -

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


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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 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 "" without the quotes and then add your search terms before hitting enter.


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.


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

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

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