Wednesday, April 18, 2018

Common Nonprofit Deals with Complex Tax Consequences

    In this article, Laura Kalick explores the tax consequences surrounding common business transactions, such as a merger or acquisition. She first discusses the tax consequences of merging two nonprofits. When merging two nonprofits, the two organizations will combine via state law, ending with one entity surviving and the other no longer existing. If either of the nonprofits had any outstanding tax liability before the merger, those liabilities do not disappear and could be transferred to the new organization. Also, both nonprofits must report the merger on their Form 990. The nonprofit that dissolves must file their Form 990 five months and 15 days after it has been terminated. To learn more about what happens in joint ventures of nonprofits, conversion between nonprofit and for profit organizations, click here:



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