Re:How Quora died
by seadan83 on Wednesday February 07, 2024 @06:01PM
(#39295519)
HAHA, apparently my comment is the number 1 result from google to the question: "can a nonprofit hoard cash", and the answer quotes me from this very thread with "Non profits cannot hoard money"
I believe I was likely incorrect and you are correct here @HillRat. The nuance where I was incorrect was if the nonprofit fails to properly pay taxes on unrelated activities - in which case the government can decide that entity is a for-profit entity. This link was helpful for me for that clarification: https://www.findlaw.com/smallbusiness/incorporation-and-lega...
I recall this being an issue for an HOA which wound up collecting more than it needed and there was concern that (A) it would be taxed & (B) nonprofit status would be lost. Paying taxes correctly is very important, but does not speak to a non-profits ability to hoard cash. My earlier comment is incorrect, I apologize for the bad information.
I believe I was likely incorrect and you are correct here @HillRat. The nuance where I was incorrect was if the nonprofit fails to properly pay taxes on unrelated activities - in which case the government can decide that entity is a for-profit entity. This link was helpful for me for that clarification: https://www.findlaw.com/smallbusiness/incorporation-and-lega...
I recall this being an issue for an HOA which wound up collecting more than it needed and there was concern that (A) it would be taxed & (B) nonprofit status would be lost. Paying taxes correctly is very important, but does not speak to a non-profits ability to hoard cash. My earlier comment is incorrect, I apologize for the bad information.