Wesley Chapel, FL asked in Tax Law for Florida

Q: if a donation was made to501(c)(3) organizations can said funds then be transferred to a 501(c)(7) to use at free will?

What are the legal ramifications of doing such?

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1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: Transferring funds from a 501(c)(3) charitable organization to a 501(c)(7) social club for unrestricted use could potentially raise legal issues. Generally, funds donated to a 501(c)(3) must be used for tax-exempt purposes, and transferring them to a 501(c)(7) for any other purpose may violate IRS regulations and jeopardize the tax-exempt status of both organizations. It's essential to consult with legal counsel to ensure compliance with relevant tax laws and regulations before making such a transfer.

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