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    Amerak's Avatar
    Amerak Posts: 1, Reputation: 1
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    #1

    Aug 21, 2012, 04:06 PM
    501 c 7 requirements
    Trying to determine if our club qualifies as a 501 (c) (7). Our club has members and there is a gathering 4 times per month. The club members pay to be members and also pay a $10.00 fee per gathering.

    However, there are other similar clubs some being non-profit and some for profit and their members will sometimes gather with us and we participate in competitions with each other. There is a fee to participate and there is also a payout for the winning places in the competition. At these competitions we also at times will get sponsorship money to put on the event.

    The majority of the funds for these events would come from members of the other clubs, not our club members.

    All funds acquired go towards club facilities, equipment, and prizes for the competitions.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Aug 21, 2012, 07:57 PM
    A question of this complexity cannot be answered on a forum of this nature. You need a tax professional who specializes in 501c work to analyze the structure of your club to determine if it qualifies.

    Based on my limited knowledge, you do NOT qualify as a charity, but you MAY qualify as a non-profit.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Aug 22, 2012, 07:09 AM
    You should review IRS guidleines here: Social Clubs

    Note that if more than 35% of your income comes from outside sources (namely the fees you charge the other clubs) you may have an issue that could jeopardize your tax-exempt status. I agree with ATE that you need a professional to review your club's organization, documents, and income statements to see whether you qualify as tax-exempt.
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