Our church is selling its church building and grounds. Can the proceeds be kept and the church continue to operate out of someone's home? What about the interest that the proceeds would earn while in the bank? We will have about $2 million in proceeds.
Assuming that the church is a stand-alone organization and not part of a hierarchical system, unless there is some unusual provision in the deed to the church real estate, it is probable that the church can sell its building and keep the proceeds as liquid assets, to be held, of course, for the benefit of the church. I don’t see any fundamental reason why the church could not operate out of someone’s home, although there may be local zoning restrictions and if you were fully utilizing a $2 million property it may be somewhat impractical.
The church may invest the proceeds and pay not tax on the income. Investment income is considered passive income and not included in the definition of unrelated business taxable income. (See Ready Reference Page: “Nonprofits Often Worry About UBIT.”)
April 17, 2009
Planned giving sounds complicated, with its CRUTs and CRATs, CLUTs and CLATS, and CGAs. It can be incredibly complicated, but it needn’t be. Keeping it simple may be the best way to start a planned giving program for a charity that hasn’t already put one in place.
This webinar offered a review of major planned giving instruments and a discussion of ones that make the most sense to emphasize in starting a planned giving program. It discussed the advantages of integrating planned giving into an existing development program, targeting the best prospects, getting buy-in from the board that is likely to generate results, and setting a structure to make it all happen.
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