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Re:Non-profit questions (1 viewing) (1) Guest
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TOPIC: Re:Non-profit questions
#6903
Dingo (User)
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Non-profit questions 7 Years, 6 Months ago Karma: 0  
I am creating a non-profit and plan on sending the application in to the IRS this month. Before I even send the application in, have people that want to donate money to my charity. What should i do with the donations that i receive in advance? Do i need to report this to the IRS? Also, on form 1023, there is a schedule of projected income and expense. Since the statement is an estimated amount does it really matter how optimistic the figures are? Will that hurt the application if the estimates are too high or low?
 
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#6906
Brian (User)
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Re:Non-profit questions 7 Years, 6 Months ago Karma: 1  
make sure you file the non-profit articles with the state. if you receive money in advance of the tax-exempt status, then you need to report that on form 990.

i dont think it matters how optimistic the estimated revenue is
 
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#6919
B Line (User)
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Re:Non-profit questions 7 Years, 6 Months ago Karma: 0  
just to add, if you file non-profit articles with the state, then you will have "non-profit" status at the state level. Once you file form 1023 and it gets approved, then you will have "tax-exempt" status. So, if you get tax exempt status in a new year, you will have to file a form 990 and the income should relate back to the date you filed the non-profit articles and be non-taxable, unless of course, it was unrealted business taxable income, in which case it would be taxable. Definately consult with your accountant.
 
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#6920
Kunchan (User)
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Re:Non-profit questions 7 Years, 6 Months ago Karma: 0  
In my opinion, you should get some ideas from IRS tax lawyers, before starting it. I think, taking donation in advance is illegal, so register it fast and consult with expert too. You have to share and discuss about all the documents with the lawyers. I think, you'll definitely get rid of these problems.
 
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#6950
Dingo (User)
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Re:Non-profit questions 7 Years, 5 Months ago Karma: 0  
How can i report on a 990 if i didnt receive tax-exempt status from the IRS before 12/31? Or are you saying to file the 990 and explain to the IRS that we applied for tax-exempt status and are waiting for approval?
 
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#6962
Henkel (User)
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Re:Non-profit questions 7 Years, 5 Months ago Karma: 0  
The problem with receiving donations in advance on a non-profit which has not received tax-exempt status before year-end is that the donor may not be able to take a charitable deduction for the contribution in the year of the gift because the entity was not a "qualified" entity under sectiokn 170 of the Code. Then again, if the non-profit files for tax-exempt status within 27 months of the non-profit organization, then when the non-profit finally gets tax exempt status, the tax exempt status will revert back to the original date of the filed non-profit articles.
 
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