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    tbamine5's Avatar
    tbamine5 Posts: 1, Reputation: 1
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    #1

    Dec 8, 2014, 12:08 PM
    Tax Exempt
    Is sale of an asset by 501c3 tax exempt entity subject to any kind of tax and do the proceeds have to be distributed to qualified entities immediately
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Dec 8, 2014, 01:06 PM
    The rules for the sale of a capital asset belonging to 501c3 organization is probably specific to tax law for 501c3 organizations. That is a specialized niche of the tax field, and is one I am NOT at all familiar with.

    Given these facts, you MAY have quite a wait before you get an answer from this forum, because the other tax experts probably are in similar states of ignorance.

    So. of course, right after I post, ebaines has posted an answer. I hope you will find his answer enlightening!
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Dec 8, 2014, 01:09 PM
    In general there are no federal taxes on the sale of an aset by a 501(c)(3). The only thing that might be an issue is sales tax, but this doesn't sound like a sale of merchandise to the general public as part a fund raiser - right?

    As for distributing proceeds - not sure what you mean by "qualified entities," so please clarify. In general the proceeds should be handled in accordance with the board's wishes - if you're selling a significant asset such as a building, property, or machinery the board should first authorize the sale and also specify how the proceeds should be handled.
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