 |
|
| Browse | Ask | Answer | Search | Join/Login |
|
|
||||
|
501 c 7 requirements
We have a large fishing club that is a 501(c)(7) organization. They run a very large tournament each year and collect entry fees from non-members. Could this tournament jeopardize their tax-exempt status since 501(c)(7) organizations may receive only up to 35% of its gross receipts from sources outside of its membership.
|
||||
|
||||
|
Yes, it can be an issue. The majority of income must come from members through dues and fees. A nominal amount may be collected as fees from non-members, but as you note if the anmount exceeds 35% the club may have its tax-exempt status challenged. But the rules are not hard and fast - if the fishing tournament furthers the clubs normal operations (namly, fishing) then the IRS will be more lenient. But if the income was from activities not related to fishing (such as parking fees, food concessions, raffles, etc) it could be an issue. To avoid uncertainty the 35% rule is anice "safe haven" to stay within.
|
||||
| Question Tools | Search this Question |
Add your answer here.
Check out some similar questions!
Our club a 501 (c) 7 recently asked for voting approval for a loan of $2million. Their documentation said 2/3 vote of members was required to approve. However, after the vote they said they only needed 51% of the vote to approve. The voting tally would have not allowed them to go forward with...
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...
We have a board member that has a current contract with the 501(c) that he sits on the board for. Is this legal, ethical, allowed?
Situation: Non profit corporation organized for over 30 years has never filed for 501(c)(7) recoginition and has never filed 990's (probably has not met requirements to file before. Is wanting to do a one time sale of standing timber. Should 1024 application be made for existing corporation or...
View more questions Search
|
