I'm sure that tax dodge has been tried in the past.What is the name of your state?North Carolina
Can a non-profit 501(C)(3) establish an LLC and then sell real estate property under the LLC and then claim the income on the non-profit as a bequest?
You said that the property that was sold was owned by the exempt organization for several years and evidently conducted its operations from that property during the time that it owned it. Then evidently the organization formed a LLC of which it was the sole member and transferred the property to the LLC. After that, the property was then sold to someone unrelated to the exempt organization for $1.4 million. Within a year after that the LLC was "destructed" which I will take to mean that the LLC was liquidated and terminated. Is that correct?What is the name of your state?North Carolina
Can a non-profit 501(C)(3) establish an LLC and then sell real estate property under the LLC and then claim the income on the non-profit as a bequest?
The NC Sec of State has the LLC formed on paper in Aug 2014 and filed in Apr 2015, and destructed in Apr 2016 two days shy of one year. I have no direct connection between the LLC (let us call the short lived real estate company: XXXXX LLC)Within a year after that the LLC was "destructed" which I will take to mean that the LLC was liquidated and terminated. Is that correct?
It seems the prior ownership of the property was another non-profit (YYYYY) corporation who's registered agent (according to NC Sec State) is the Executive Director of principal non-profit (ZZZZZ) in question. According to county tax records, YYYYY Inc. (non-profit) transferred the real estate property in 2006 (Transfer Date 01/05/06, Price $0, Legal Reference: NON WARRANTY DEED) to ZZZZZ non-profit [online tax records don't go back further that 2006].What you have not told me is how the organization got the property in the first place.
ZZZZZ non-profit is operating under federal funds to provide benefits to homeless veterans; in doing so ZZZZZ non-profit exploits the homeless veterans as a free labor work force at their non-profit and for-profit business interests. The homeless Veterans were gathered and shuttled to the real estate property in question, for the purposes of emptying out the property which was a condition of the sale; the veterans were not paid for their labor. This one instance is a single example of a pattern of practice that is a daily occurrence at the non-profit. The federally funded non-profit is operating under a self-designed homeless Veterans program which seems to suggest that working the homeless veterans for no pay teaches time management skills, job skills, and a sense of purpose. So I have to ask, what is an hour of a homeless veterans labor worth?What is your concern here? What is it that you suspect the organization has done and why?
U.S.C. 29 § 203 (s)(1)(a)(ii) (ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated);
I do not have access to the LLC.s books. Thanks for the PDF, it looks like it will help me make a informed opinion.https://www.irs.gov/pub/irs-tege/eotopich94.pdf
Who are you in this situation? Do you have access to the LLC's books?