Читать книгу The Law of Tax-Exempt Organizations, 2021 Cumulative Supplement - Bruce Hopkins R., Bruce R. Hopkins, David Middlebrook - Страница 40
ОглавлениеCHAPTER FIFTEEN Social Clubs
§ 15.1 Social Clubs in General (b) Club Functions
§ 15.1 SOCIAL CLUBS IN GENERAL
(b) Club Functions
p. 365, carryover paragraph. Insert as last sentences:
As still other examples, a membership organization of football officials functioning in public school districts was denied recognition of tax exemption in part because of lack of “social commingling or fellowship” among its members; the only gatherings were training sessions, which were not mandatory.15.1 The same held for a membership entity whose members met weekly to make decisions and take advantage of opportunities within its local business region.15.2
p. 366, note 31. Insert following existing text:
A nonprofit organization that merely leases property to a tax‐exempt fraternity or sorority cannot qualify for exemption (e.g., Priv. Ltr. Rul. 201927023).
§ 15.4 EXCEPTIONS TO LIMITATIONS
p. 372, second complete paragraph. Insert as last sentence:
In another instance, the IRS ruled that income from the sale of emission credits will not disturb a social club's tax exemption because the sale will be a new source of income for the club and the sale activity will be a nonrecurring event.93.1
§ 15.5 TAXATION OF SOCIAL CLUBS
p. 376, second complete paragraph, second and third sentences. Delete and insert:
This decision was affirmed; as to the factual issue of whether the club demonstrated a profit motive, the court of appeals conceded that “demonstrating profit motive without profitability proves difficult.”120.1 Entities in this position, the appellate court continued, “generally must show that their intent to profit was thwarted somehow.”120.2 It added: “When an organization is consistently unprofitable, even tougher.”120.3 The court then stated this telltale observation: “Although courts review holistically all relevant facts and circumstances when deciding whether an activity is a business or hobby, a long history of consistent and unexplained losses can overwhelm all other factors.”120.4 This club, the appellate court concluded, “never adduced any evidence that it attempted to stem its flood of losses, or that it expected to eventually profit.”120.5
