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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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I am the President of the Filipino-American League of Pierce

Resolved Question:

I am the President of the Filipino-American League of Pierce County. The League bought a small house. This property is paid up. Can we rent out the house so we can pay our insurance and utility bills?
Submitted: 5 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your question.

This league, is it incorporated? Is it a non-profit?
Customer: replied 5 years ago.
yes, it is a non-profit. we have 501c3.
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

A non-profit has to be careful about engaging into any sort of business since they are not able to show a profit by the time they file taxes. This is why while it is permissible to rent out the premises so long as all of the earnings are reinvested and spent on the non-profit, it is highly inadvisable unless your accountant also approves. The biggest hangup is since your non-profit is not in the business of providing housing, the rent may be beyond the scope of your charter and therefore may cause you to lose your non-profit status if you engage in such a business endeavor.

Good luck.
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