|FROM ||From: "Joseph A. Maffia"
|SUBJECT ||Re: [hangout] What will nylxs taxable status be (i.e. profit,
|From owner-hangout-desteny-at-mrbrklyn.com Fri Nov 9 00:31:29 2001
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Thu, 8 Nov 2001 23:27:05 -0500
Date: Thu, 8 Nov 2001 23:27:05 -0500 (EST)
From: "Joseph A. Maffia"
To: Ruben Safir
cc: "Michael E . George" ,
"hangout -at- nylxs . com"
Subject: Re: [hangout] What will nylxs taxable status be (i.e. profit,
non-profit, not for profit, Ltd...)?
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Reply-To: "Joseph A. Maffia"
List: New Yorkers Linux Scene
Admin: To unsubscribe send unsubscribename-at-domian.com to hangout-request-at-www2.mrbrklyn.com
My 2 cents:
Not for profit vs. For profit.
Short story - I suggest an unincorporated entity vs. a not for profit for
practical reasons. For those that have nothing else to do...read on for
the specific reasons.
Not for profit status is for the SERIOUS organization with
the resources necessary to carry out it's mission - in other words - it
requires money and people. An attorney would have to file an application
and incorporate the entity. If dues, donations exceed $25,000
per year - the red tape gets hairy. As the organization grows the red tape
is even more significant. (i.e. annual audits) The cost of setting up the
entity could be steep $2,000 to $5,000. I don't suggest this route unless
the organization expects salaried employees to carry out it's mission.
The other question is whether the organization would qualify - in general
an organixation may qualify for exemption from federal income tax if it
is organized and operated exclusively for charitable, religious,
educational, scientific, literary or public safety, under (501 (c)(3)) of
the internal revenue code. The plus is that contributions would
be deductible by the payor.
The NYLXS may qualify under section 501 (c)(7) - Social club or a
domestic fraternal organization under 501(c)(8). Other sections may apply.
Contributions would not be deductible by the payor. We would need to seek
advice from an attorney.
There are many types of profit organizations - a corporation (Section C S
or LLC) would require annual tax return filing and for the most part would
be a tax paying entity. Sub S and LLC is a pass thru entity - that passes
the taxable income or losses to the owners. A corp and or partnership
would require owners. In some cases there are limits to the number of
owners and complex rules on profits distrubutions, etc.
An unincorpated entity would be a sole proprietoryship, partnership and
LLP (well kinda). For ease of doing business...i.e. collecting and
disbursement of funds I suugest an unincorporated entity. The
drawback is that there would be annual filing requirements and if the
organization is profitable - we would have some tax implications.
Since I expect we would operate as if we are a not for profit and
therefore would show little profits at the end of the year - I am not too
Lastly, any member of the organization would not have any legal liability
to or for the organization. Only owners, officers and board of directors
would have any legal liablity.
Sorry for the long winded answer.
Joseph A. Maffia, CPA
Rosenzweig & Maffia LLP
845 Third Ave.
New York, NY 10022
On Thu, 8 Nov 2001, Ruben Safir wrote:
> The Bass trip on Sunday is at 6PM so it looks like it's not gonna work after the
> install feast.
> Monday morning Porgies instead?
> On 2001.11.07 22:03:14 -0500 Michael E. George wrote:
> Trying to understand what legal liabilities I will have when becoming a
> nylxs member.
> n:George;Michael E.
> tel;pager:866 231 0770
> tel;fax:212 995 4551
> tel;work:212 998 9817
> org:NYU College Of Dentistry;Information Systems
> title:Network Administrator/ Technical Services Supervisor
> adr;quoted-printable:;;433 First Avenue=0D=0ASuite 122;New York;NY;10010;USA
> fn:Michael E. George
> Brooklyn Linux Solutions
> http://www.mrbrklyn.com - Consulting
> http://www.brooklynonline.com - For the love of Brooklyn
> http://www.nylxs.com - Leadership Development in Free Software
> http://www.nyfairuse.org - The foundation of Democracy
> http://www2.mrbrklyn.com/resources - Unpublished Archive or stories and articles
> from around the net
> New Yorker Linux Users Scene
> Fair Use -
> because it's either fair use or useless....
New Yorker Linux Users Scene
Fair Use -
because it's either fair use or useless....