tccrab

I'm the Secretary of our flying club and I've volunteered to bring our club into the 21st Century.
Beginning to question my sanity right about now........
It only took 5 months to get us Incorporated thanks to the backlog at out Secretary of States Office here in California.
Am now working on filling out the IRS Form 1024 for our 501(c7) and don't want to re-invent the wheel.
Anybody willing to share some info on a couple of deceptively simple yet extremely delicate parts of the form?

"Part II, Item 1, Activities and Operational Information".
"Part II, Item 8, Explain how your Organization's assets will be distributed on dissolution"

My guess is that we will want to keep it as simple as possible.

Thanks in advance,

Tom Crabtree
My direct email is "tccrab at comcast dot net"

Hossfly

I belong to Jetero RC Club NE area of Houston, TX. Jetero is a 501 (c) (7) club. We got our status in around 1996-7. [:-]

Part II Activities and Operational as I recall was simply a club to encourage safe model aviation and provide facilities thereof. Something like that.

Now "Distribution of Assets" is best described as transferring to AMA, a 501 (c) (3) organization. To add some spice that could include the Museum or the Foundation when / if such happens. All assets must go to another 501 (c) organization.

Right now IMO, IRS has a load on their shoulder and my bet is anyone can get whatever they wish for. [:@] [:'(] [] [:-]

DadsToysBG

My Feedback: (35)

And don't have TEA or PARTY in the club name.

phlpsfrnk

I assume you are following the guidance provided here;

http://www.modelaircraft.org/files/505-b.pdf

Regards
Frank

tccrab

Frank:

Some of the information there is quite useful with the notable exception of IRS Form 1024.
You will get quite a chuckle from the help they offer on this subject.

Tom

phlpsfrnk

Tom,
While I agree, on the face of it, 505-D does not appear very helpful but if you open and study the AMA 505-C sample IRS Form 1024 the four questions that state "Answer depends on individual club" you will note that they are the only questions that do not have sample text or check offs of what should be in the blanks. The AMA provided a completed sample with the exception of the four questions that would be specific to your club. The four questions are pretty straight forward and should not be difficult in getting a consensus from the club officers on how to respond.

Regards
Frank

phlpsfrnk

Tom,
For Item 1 I would list things like fun flys and RC work shops mall shows and organized contests, youth education gatherings would be a good thing if your club does anything like that.

From AMA sample Item 8 use;
Upon dissolution, after the payment of all outstanding debts and expenses, the assets of the club will be distributed to such organizations that qualify as exempt organizations under Section 501(c) of the Internal Revenue Code
Hope this helps.

Regards
Frank

MajorTomski

Tom, some great advice from all above.

The key to remember is that the "non-profit" term means that the company(club) does not redistribute any profit it makes back to the share holders, instead ALL of the profit it makes goes back into maintaing the company(club) and spending it on the folks that learn from your non profit organization. Now, if the company should disolve it passes those profits on to ANY other non-profit.

The AMA happens to be a convienient non-profit to send your money to, but you could just as easily give the money to the Red Cross or other local registered non profit in your area.

This arrangement has to be in advance and in writing.

The biggest misunderstanding held by lots of AMA members is that if your club is nonprofit there can't be any profit off of any activity and that your books have to have a zero balance at the end of your fiscal year. This is simply not true.

Now, if the club disolves and you give the left over monies to the remaining members you've just violated the non profit concept and given a profit to the shareholders. ALL of them would now be responsible for paying the back Federal, state and county taxes on the disolved corporation, that you didn't pay because you claimed non-profit.