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Brenda Guy
Brenda Guy, Certified Public Accountant (CPA)
Category: Tax
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Experience:  20 years of working with income and estate tax issues for families and businesses.
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Its the final tax return of a 501(c)(3) filing a 2009 990PF.

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It's the final tax return of a 501(c)(3) filing a 2009 990PF. The nonprofit owned various rental properties. Some were sold while others were transferred to a trust. If the trust is also a 501(c)(3) do I show this on the tax return under schedule of contributions (Part XV)? If not, what section do I list this under? Are there tax consequences related to this transfer if any of the transferred properties are mortgaged? If the trust the properties are transferred to not a nonprofit, would that be illegal? Or are there merely tax consequences? Thank you for your help
Submitted: 3 years ago.
Category: Tax
Expert:  Brenda Guy replied 3 years ago.

The mortgages do not pose a problem. As far as transferring to a not non-profit that will be subject to tax and penalties.



Edited by Brenda Guy on 11/3/2010 at 6:36 PM EST
Expert:  Brenda Guy replied 3 years ago.
See the instructions for 990pf for more specific information.
Brenda Guy, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 151
Experience: 20 years of working with income and estate tax issues for families and businesses.
Brenda Guy and other Tax Specialists are ready to help you
Customer: replied 3 years ago.
Do I treat the transfer as "Grants and Allocations" on Part XV of the 990-PF? It turns out the properties are being transfered to a nonprofit. So would i class it as a noncash charitable contribution? The bases of all properties being transferred amounts to close to $5 million. Will that raise a rred flag? Do I need to attach statements? Thanks for your help
Expert:  Brenda Guy replied 3 years ago.
Yes, I would classify it as a noncash contribution. I don't think it will raise a red flag. The 990pf instructions on page 8 talk about the disclosures that need to be made when termination. I would follow those instructions a best as you can. There may be some correspondence generated requesting additional info. But it should not be an issue.
Brenda Guy, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 151
Experience: 20 years of working with income and estate tax issues for families and businesses.
Brenda Guy and other Tax Specialists are ready to help you

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