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Nonprofit Organization Questions?

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#1
I have a large collection of historical paper items that would be of interest to people doing genealogy and historical research (i.e., hundreds of thousands of items including letters, documents, photos, etc.). The closest comparison would be ancestry.com except my documents are one-of-a-kind items handed down through families as opposed to material taken from public records. I want to place these on a web site and generate income from ad networks and affiliate ads.

As this site will attract many users I also am thinking of adding a shop for the sale of antiques and collectibles. I have 18 years experience selling online on 3rd party sites but want to move to my own site. The income from the non paper antiques would be declared on my income taxes as a separate business as they are now. It would be way for site users to make a non charitable contributions to the site as profits on the antiques would allow me to use some of my time to run the site.

I want to setup a nonprofit to accept donations from people who enjoy the site that would qualify as charitable deductions for the donors. These would include monetary contributions and donations of paper items that users wish to have placed on the site. The monetary contributions would be paid to me as a contractor for use of my equipment and my time spent photographing, catalog items and indexing items on the site. I would then report these funds as taxable income on my own tax return. The paper items would be added to the collection and web site.

What would be the best way to organize this and meet all tax requirements?
 


#2
Most likely you need professional legal help.

The first thing you have to do is create a corporation that has a purpose which is compatible with ones listed in section 501. Generating income for you isn't one of those.
 
#3
I want to setup a nonprofit
It's easy to be nonprofit. Just sell things for less than you pay for them.

What you really mean is you want to be tax exempt.

What would be the best way to organize this and meet all tax requirements?
My gut says you won't qualify for tax exempt status.

But there's no reason that you can't do everything listed without being tax exempt.
 
#4
What would be the best way to organize this and meet all tax requirements?
What you describe, in its entirety, is a for profit business operation. Thus it would not qualify for tax exempt status with the IRS. How you want to operate the two parts, the advertising business and the antique business, will guide how you set this up (e.g. what kind of business entities to use, whether you use just one entity for both parts or separate entities for each one, etc) are things you want to discuss with a business attorney and a tax attorney or other tax professional.
 
#5
TM the way I read the OP was that the "old stuff" business was going to be more like a freely accessible not-for-profit website.

But I agree with you on the outcome. The IRS would likely see it as a marketing move of the for-profit business. The OP even made the point himself when he compared it to ancestry.com. They have lots of free stuff but they aren't a charity.
 
#6
He also stated private benefit to himself as the motivation for the business, that's not going to fly for tax exemption.
I'm on the board of a couple of non-profits (and likely to be soon on the board of a third).
 
#8
TM the way I read the OP was that the "old stuff" business was going to be more like a freely accessible not-for-profit website.
Most sites that are "freely available" do not qualify for tax exemption. It takes more than that to meet the requirements for exemption. Moreover, the OP said that ancestry part of the site would be supported by ad revenue.
 
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