On Wed, Mar 5, 2014 at 9:12 AM, Justin Herman <[email protected]> wrote:
> This has already be researched.... > > http://www.irs.gov/pub/irs-pdf/p1828.pdf > > Page 17 Section Rental Income: > > "Generally, income derived from the rental of real property and incidental > personal property is excluded from unrelated business income." > > It goes on to state HOW it would not qualify. (if there is a mortgage, if > personal services are rendered, if a parking lot is charged) > > I thought that this might not relate to us as this doc is targeted for > religious orgs. So I called the IRS before and they stated that this is for > ALL 501(c)(3) orgs. > > I know I'm a non-member, and new to the discuss list, but I thought I'd chime in on this, as I have been a part of financial decisions in a non-profit before. Disclaimer: IANAL My reading of this code suggests that the legality of this would require some very careful writing and policies. While it is most likely possible to supplement income with some careful crafting of policies, you would be opening up the organization to a greater possibility of audit. Further, the limits of this would be pretty large as the Connivence of Members exception is fairly murky legally in many cases. Cafeterias in schools fall under this because it would cause a hardship to the members (students) of the organization if they were to have to procure meals, so the sale of food is seen as necessary for smoother operation of the organization. You would have to provide a reason like this. This is what is meant by income that is "primarily for the convenience of its members." If you are receiving income as someone "acting as a member of the public" this, in my understanding, is taxable. Owning property and renting out to a third party is generally OK, if it's a "managing the property" relationship. You can not sell your space for rent directly unless it's explicitly for organizational purposes. This is the parking lot example. It's Ok to charge money for church members to use the lot FOR CHURCH PURPOSES, but not OK to charge anyone for any other purpose. You can lease out the property to be managed by a third party, who in turn can charge, but that gets hairy too. So while it's entirely possible to make this legally viable, I would advise against it due to the legal hoops that have to be jumped through. Especially if the income in question is going to be small. As an aside, I'm new to hackerspaces, but wouldn't the sale/rental of space be the opposite of the mission to provide a space for the public to come and make things? I think there's a potential cost to the image of SynHak if a public space is being used for the sole gain of an individual or individuals. Just my layman's two cents. > > On Wed, Mar 5, 2014 at 9:03 AM, Devin Wolfe <[email protected]> wrote: > >> Can you please provide your source? >> >> Thanks, >> Devin >> >> Sent with AquaMail for Android >> http://www.aqua-mail.com >> >> >> >> On March 5, 2014 8:55:49 AM Torrie Fischer <[email protected]> >> wrote: >> >> I'm wearing my treasurer hat for this. >>> >>> After some digging around, I've come to the conclusion that leasing out >>> this space is incredibly likely to be considered a violation of our 501c3 >>> status as it is unrelated income. That $100/mo will need to be taxed and >>> somehow proven that leasing out our space to non-hacking purposes will >>> further our mission of providing infrastructure to creative people. >>> >>> I'm not cashing any checks that arrive. >>> _______________________________________________ >>> Discuss mailing list >>> [email protected] >>> https://synhak.org/mailman/listinfo/discuss >>> >> >> >> _______________________________________________ >> Discuss mailing list >> [email protected] >> https://synhak.org/mailman/listinfo/discuss >> > > > _______________________________________________ > Discuss mailing list > [email protected] > https://synhak.org/mailman/listinfo/discuss >
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