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Nonprofit Law/For Profit Business in a Church

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Question
I am a member of a church and have asked to rent a small amount of space (about 450 sq. ft.) in the church for my consignment business. Are there any tax implications for the church? I file my own business taxes, have my own insurance and EIN. Aside from rent, the church would benefit from donations which I would consign on behalf of the church. I've tried to understand the various IRS regulations, but there are so many exceptions. Simply put, are there any issues with renting space to run a private, for profit consignment shop in a church?

Answer
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 would not want the church renting the space to you for less than the market rate. Otherwise, it would appear that they would be engaging in some activity that is not charitable, educational or religious.

Even though this forum is not for such state law issues,I will inform you that the church will lose property tax exemption on the space they rent to you.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com
Member of New York Bar.

P.S. This response s 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

Expertise

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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