Re: Cohousing communities and tax-exemption, 501c3
From: Ken Winter (kensunward.org)
Date: Fri, 12 Jun 2015 09:16:13 -0700 (PDT)
I was asking about 501(c)(3) for another, less obvious, reason.

As mentioned in threads several months ago, I'm looking for a way to
provide cohousing communities with portals - member's web sites that
provide one-stop-shopping access to all of a community's information
services.  One way to do this is to use a commercial "platform" - a
facility that provides you most or all of what you need, more-or-less out
of the box.

All you have to do to get it is *pay*.  Alas, you have to pay many times
what a coho community would be willing or able to pay, because the
sustaining customers of these platforms are for-profit corporations.
However, some of these platform companies offer their facilities at deeply
discounted prices to non-profits.  Salesforce.com, the one I know the most
about, has a nonprofit rate that is roughly 10% of the for-profit rate.
(By the way, even at that price, I'm not sure the Salesforce platform would
be affordable for our purposes.)

Generalizing from the portal example, I'm thinking that there may be a
whole range of goods and services out there that for-profit companies,
governments, or other providers make available free or cheap to 501(c)(3)
nonprofits.

~ Ken, from Sunward Cohousing

On Fri, Jun 12, 2015 at 10:37 AM, Ann Zabaldo <zabaldo [at] earthlink.net> 
wrote:

>
>
> PS: just because an organization is a nonprofit does not make it
> tax-exempt. You have to apply for tax exempt status. So even if you are a
> nonprofit you still have to pay taxes. The two absolutes in life: taxes and
> death.
>
> Sent from my iPhone
>
> > On Jun 12, 2015, at 8:27 AM, Diana Carroll <dianaecarroll [at] gmail.com>
> wrote:
> >
> >
> >> On Friday, June 12, 2015, Sharon Villines <sharon [at] sharonvillines.com>
> wrote:
> >>
> >>
> >> The fear of taxes and the desire to avoid them is actually not a big
> >> concern, however. As a condo, the income is offset by expenses so there
> is
> >> little if any profit. Until your reserves are large enough to earn
> >> significant earnings in interest, there will be little if any income to
> tax.
> >
> > That depends.
> >
> > Any income from a source other than dues (assessments) is taxable.  So,
> for
> > instance, we have a usage fee for overnight stays in the guest room, and
> we
> > request contributions when an outside group uses our common house for a
> > function.  These are taxable at 30% on the HOA tax form (1040h?). For us
> > that amounts to a few hundred a year in taxes...not enough to make a huge
> > difference. But it might account for more some communities.
> >
> > Being a qualified non profit also has the potential to benefit
> individuals
> > in the community.  "Donations" would be tax deductible for the donated.
> We
> > don't really have donations, but I know some communities have fund
> raising
> > efforts beyond assessments. Like, a community may request pledges from
> > individual households to build, say, a playground or swimming pool. It
> > would be hard to convince the IRS an HOA served a larger community good
> but
> > if you could, then individual contributors would see a benefit.
> >
> > Diana
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> >
> >
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