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Can an LLC accept charitable contributions, be a 527 corp?

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Can an LLC accept charitable contributions, be a 527 corp?

I am forming a multi-media production/publishing entity which focuses on educational, religious, & literary themes, as well as socio-political themes, which will be offered to religious & educational institutions, as well as the public at-large. In consideration of forming as either as an LLC or a 501(c)(3). 1)Can an LLC accept charitable contributions? 2)Can a 501(c)(3) also be a 527 corp?

You should not try to distinguish between a 501(c)(3) and a limited liability company (LLC). 501(c)(3) is a tax-exempt status for charities. LLC is a type of entity. Several types of entities, including corporations, trusts, and LLCs, can qualify for Section 501(c)(3) charitable status if they are organized and operated exclusively for charitable purposes. An entity that is recognized as a charity under 501(c)(3), including an LLC, may accept and give deductibility to charitable contributions. An LLC that has a single charity as its sole member is a "disregarded entity" and does not need to obtain a separate recognition as a 501(c)(3).  After many years of delay, the IRS has ruled that gifts to such an entity are deductible. (See Ready Reference Page: "LLCs Becoming Entity of Choice for Subsidiaries.")
 
Section 527 is the section that exempts political organizations from income tax. A charity may not engage in political activity, and a 501(c)(3) may not also be a 527. 
Saturday, March 26, 2011

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