Q: When a non-profit organization dissolves, does the IRS-required asset-distribution clause apply to fixed assets, home?
If a home was listed in a non profits assets on 990 form but the majority was purchased in Mexico (foreign country) with "own" money and only part from non-profit assets "donor", assuming the asset was purchased over 25 years ago, if the non-profit dissolves, is the asset required to be sold under IRS-required asset-distribution clause? If so, would only the portion of the proceeds that was used to initially purchase the fixed asset need to be distributed? For example 10k used from donor to initially purchase, would the 10k that was donated need to be distributed or would the entire value of the asset disregarding what portion of the asset was acquired using private "own" funds?
A:
When a non-profit organization dissolves in California, the IRS-required asset distribution clause generally applies to all assets, including fixed assets such as a home. The allocation of proceeds upon sale would depend on the ownership structure of the property and the proportion of non-profit funds used for acquisition. If a portion of the property was purchased using non-profit assets, that proportion's value would likely need to be distributed, while the remainder may be attributed to the individual owner's funds. Consulting legal counsel is recommended to navigate the specific circumstances of the property and dissolution process.
Sincerely,
James L. Arrasmith
Founding Attorney and Chief Lawyer of The Law Offices of James L. Arrasmith
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
