State nonprofit but no fed tax exemption

[Vityaba]

A nonprofit corporation (by state law) is collecting money from members of a community and then spends them for whatever their mission is. Do I include "donations" collected in the gross revenue and expenditures in the expenses?

Since the corporation is not tax exempt by the IRS I'd say yes, it has to include those funds in gross revenue, but at the same time it makes no sense because these are real donations that people make without getting anything in return.

 

Your thoughts?

 

 

[Jack from Ohio]

A nonprofit corporation (by state law) is collecting money from members of a community and then spends them for whatever their mission is. Do I include "donations" collected in the gross revenue and expenditures in the expenses?

Since the corporation is not tax exempt by the IRS I'd say yes, it has to include those funds in gross revenue, but at the same time it makes no sense because these are real donations that people make without getting anything in return.

 

Your thoughts?

Yes to both your questions.  Looking for sense in tax regs is a waste of time.

[JJStephens]

A couple points (that may or may not help!):

• Being non-profit and being tax-exempt are completely separate issues. An organization organizes at the state level as a non-profit entity. Tax exemption is attained by meeting the requirements for the particular tax
• An organization is required to file a return unless it is statutorily exempt from federal income tax (e.g., a church or a non-profit that has revenues of less than $5000/year) or recognized as an exempt public charity or private foundation (i.e., a 501c3 organization) by virtue of an approved Form 1023 or recognized as another kind of exempt organization by virtue of an approved Form 1024 .
• Regarding the donations issue: not all exempt organizations are eligible to receive deductible donations. For example, 501c4's and c6's (etc) can receive donations, but the donor is not permitted to take an itemized deduction for them.