MESSAGE
DATE | 2001-11-08 |
FROM | From: "Joseph A. Maffia"
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SUBJECT | Re: [hangout] What will nylxs taxable status be (i.e. profit,
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My 2 cents:
Not for profit vs. For profit.
Short story - I suggest an unincorporated entity vs. a not for profit for practical reasons. For those that have nothing else to do...read on for the specific reasons.
Not for profit status is for the SERIOUS organization with the resources necessary to carry out it's mission - in other words - it requires money and people. An attorney would have to file an application and incorporate the entity. If dues, donations exceed $25,000 per year - the red tape gets hairy. As the organization grows the red tape is even more significant. (i.e. annual audits) The cost of setting up the entity could be steep $2,000 to $5,000. I don't suggest this route unless the organization expects salaried employees to carry out it's mission.
The other question is whether the organization would qualify - in general an organixation may qualify for exemption from federal income tax if it is organized and operated exclusively for charitable, religious, educational, scientific, literary or public safety, under (501 (c)(3)) of the internal revenue code. The plus is that contributions would be deductible by the payor.
The NYLXS may qualify under section 501 (c)(7) - Social club or a domestic fraternal organization under 501(c)(8). Other sections may apply. Contributions would not be deductible by the payor. We would need to seek advice from an attorney.
For profits.
There are many types of profit organizations - a corporation (Section C S or LLC) would require annual tax return filing and for the most part would be a tax paying entity. Sub S and LLC is a pass thru entity - that passes the taxable income or losses to the owners. A corp and or partnership would require owners. In some cases there are limits to the number of owners and complex rules on profits distrubutions, etc.
An unincorpated entity would be a sole proprietoryship, partnership and LLP (well kinda). For ease of doing business...i.e. collecting and disbursement of funds I suugest an unincorporated entity. The drawback is that there would be annual filing requirements and if the organization is profitable - we would have some tax implications. Since I expect we would operate as if we are a not for profit and therefore would show little profits at the end of the year - I am not too concerned.
Lastly, any member of the organization would not have any legal liability to or for the organization. Only owners, officers and board of directors would have any legal liablity.
Sorry for the long winded answer.
Joe
Joseph A. Maffia, CPA Rosenzweig & Maffia LLP 845 Third Ave. New York, NY 10022 212-980-2470
On Thu, 8 Nov 2001, Ruben Safir wrote:
> > The Bass trip on Sunday is at 6PM so it looks like it's not gonna work after the > install feast. > > > Monday morning Porgies instead? > > On 2001.11.07 22:03:14 -0500 Michael E. George wrote: > Trying to understand what legal liabilities I will have when becoming a > nylxs member. > > begin:vcard > n:George;Michael E. > tel;pager:866 231 0770 > tel;fax:212 995 4551 > tel;work:212 998 9817 > x-mozilla-html:FALSE > org:NYU College Of Dentistry;Information Systems > version:2.1 > email;internet:meg7-at-nyu.edu > title:Network Administrator/ Technical Services Supervisor > adr;quoted-printable:;;433 First Avenue=0D=0ASuite 122;New York;NY;10010;USA > fn:Michael E. George > end:vcard > > -- > __________________________ > > Brooklyn Linux Solutions > __________________________ > http://www.mrbrklyn.com - Consulting > http://www.brooklynonline.com - For the love of Brooklyn > http://www.nylxs.com - Leadership Development in Free Software > http://www.nyfairuse.org - The foundation of Democracy > http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and articles > from around the net > > 1-718-382-5752 > > > > ____________________________ > New Yorker Linux Users Scene > Fair Use - > because it's either fair use or useless.... >
____________________________ New Yorker Linux Users Scene Fair Use - because it's either fair use or useless....
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