[Finance] Running a Company inside a 501(c)3 Makerspace

[Edward L Platt]

Running a for-profit business out of a 501(c)(3) is totally do-able.  See,
for example, 501(c)(3) business incubators.  The main rules are that the
business should pay a fair amount for what it uses, even if that's just
buying a membership, and that no particular business should get special
treatment.

Caveats to consider:
* Income from renting to businesses could be considered unrelated business
income, which might affect your public support test.
* If your community has personal property tax, you may be responsible for
paying tax on any equipment you keep at the space.

IANAA, as always, consult a CPA who specializes in non-profits for the
final word.

Happy Hacking,
-Ed

On Wed, Feb 22, 2012 at 5:04 PM, Lokkju Brennr <lokkju at gmail.com> wrote:

> IANAL and IANAA, but...
> I'd just have your business rent space from the 501(c)(3).
> Essentially, create a "business" level hackerspace membership.  The
> rent/membership would not be tax deductible as a donation for your
> business, but would be tax deductible as a business expense.  For the
> non-profit, it is just like any other income.
>
> Loki
>
> On Wed, Feb 22, 2012 at 2:00 PM, Jonathan Bowen <jonbowen234 at gmail.com>
> wrote:
> > We are starting a Makerspace in Pensacola.FL. Emerald Coast Community of
> > Makers (eccmakers.com)
> >
> > We are still working on our By-Laws and setup our corporate structure.
> > Someone brought up a point that I wanted to see if anyone else has run
> into
> > problems with.
> >
> > Is it legal for me to use the equipment in a Non-Profit makerspace to run
> > my business?
> >
> > The space will most likely file for 501c3 status. I run my own company
> out
> > of my house right now. www.corseceng.com I want to move most of my
> > production equipment to the space for use by the members and to get it
> out
> > of my house :) I plan to spend a lot of time down there. I'm already
> > planning on purchasing larger equipment for the space as money is made
> > available.
> >
> > I will not entertain clients in the space. I do not plan to make it my
> > office but I will be producing my products at the site and with the space
> > equipment.
> >
> > Thanks!
> >
> > Jonathan Bowen
> >
> > _______________________________________________
> > Finance mailing list
> > Finance at lists.hackerspaces.org
> > http://lists.hackerspaces.org/mailman/listinfo/finance
> >
> _______________________________________________
> Finance mailing list
> Finance at lists.hackerspaces.org
> http://lists.hackerspaces.org/mailman/listinfo/finance
>



-- 
Edward L. Platt
http://elplatt.com
248.320.5061
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.hackerspaces.org/pipermail/finance/attachments/20120222/2d9f8135/attachment.html>