Cohousing-L Mailing List: Securities & taxes, oh my, oh my!

[Stephen Farley (sfarley]

Since we at the Tucson Neighborhood Development Corporation (formerly 
Tucson Cohousing) have only recently incorporated as a non-profit, we 
have lots of issues to figure out regarding securities and taxes.

If you are, or have been a non-profit corp, could you provide details 
on  some of these issues?
 
1) We are aiming to develop a neighborhood, not the actual buildings. 
For that, we are hiring a builder, who will also purchase the land. Do 
our memberships still fall under the category of securities, and thus 
need to be regulated by SEC rules, even if we are a non-profit? Either 
way, how do we word our offerings?

2) Each member will commit to paying $7600 in development costs for the 
project. Are we better off classifying this investment as a loan to the 
corporation, and selling shares for $1 each, to avoid corporate 
taxation? If so, how do we make these "loans" legally binding? And who 
pays taxes on any interest we may earn on the moeny while it is in the 
possession of the corporation?

3) How do we count past, pre-incorporation investment by members as a 
part of the present investment in the corporation?

4) Are we better off using cash-basis accounting or accrual?

5) Anybody have any sample accounting categories they could share?

I realize all this is a lot to ask, so if you might be able to give me 
your accountant's number instead, that would be great, too!

Thanks!

Steve Farley
sfarley [at] igc.apc.org