Legal Question in Business Law in Texas

Can a non profit organization(501c3), if has property donated or sold to them, rent a portion of that property out without compromising their non profit status? Or, could said non profit pay someone to live on property for upkeep? We are looking at a forclosed property owned by a bank. If we can get a 'bargain sale' price, and we have the 'infrastructure' in place to support property, can we either rent out the apartment on property or should we pay someone to stay there and provide upkeep to property? All without compromising our non profit status(501c3).

Thank you.


Asked on 9/26/11, 6:25 pm

1 Answer from Attorneys
Arthur Geffen Arthur H. Geffen, P.C.

It depends on your charter and the information you submitted to the IRS to receive the exemption. In all liklihood the income from the property would be unrelated business income and subject to taxation. Check with the people who helped you get the exemption.

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Answered on 9/27/11, 8:20 am


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