Table of Contents >
   Part L. Generating, Managing and Sustaining Financial Res... >
      Chapter 43. Managing Finances >
         Section 4. Understanding Nonprofit Status and Tax Exemption >
             Tools & Checklists - A checklist that summarizes the major points contained in the section. >

Understanding Nonprofit Status and Tax Exemption

  

Tools & Checklists

 Contributed by Jenette Nagy and Chris Hampton Edited by Phil Rabinowitz and Kate Nagy

Checklist

Here, you'll find a checklist summarizing the major points contained in the text.


___You understand the importance of legal counsel when applying for nonprofit status and tax-exemption.

___You understand that nonprofit status is granted by the state, while the federal government grants IRS tax-exemption.

___You know the three types of federally recognized nonprofit organizations are a corporation, an unincorporated organization, and a trust.

___You understand that becoming a corporation is the most common choice for community organizations, because it is well understood, promotes continuity, and limits personal liability.

___You know that 501(c)(3) is the "charitable tax-exemption."

___You understand that it allows exemption from federal corporate and income taxes, and that it allows solicitation of tax-deductible contributions.

___You know there are a total of 26 different exemptions for different purposes.

___You understand that there are three ways to become tax-exempt: application, automatic recognition, and using a fiscal conduit.

___You understand the advantages of nonprofit status.

___You understand the advantages of federal tax-exemption.

___You understand the disadvantages of nonprofit and tax-exempt status.

___You understand when you should (and when you shouldn?t) consider applying for such status.

___You understand how to apply for nonprofit status.

___You understand how to apply for federal tax-exemption.

___You know where to find inexpensive assistance.