chadw Posted March 14, 2011 Report Share Posted March 14, 2011 Small not for profit was started in 2010 and was incorporated as a non-profit. However, it was decided that it wasn't going to go after tax exempt status. I assume it is an 1120 form and it has to then pay taxes on any "income" it had during the year. This was the first year and it had not given away all the cash it had been donated. Is this correct? Thanks Chad Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 14, 2011 Report Share Posted March 14, 2011 That's correct, normally starting NP start as a 1120 for tax purpose, once approved they would file a 990. Why not have your client file a 990 and report "for profit" income as taxable income on the 990, same goes for expenses. Can your share the reasoning? Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted March 16, 2011 Report Share Posted March 16, 2011 It's my understanding that some types of organizations are tax exempt automatically, and only need to file application for exemption when they reach an income level that requires them to file 990. So - if they are expecting to only have nominal income and are not trying to "profit" so to speak, then they stay under the radar. What type of org are you dealing with? Quote Link to comment Share on other sites More sharing options...
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