Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I'm Treasurer of a Quilt Guild which qualifies as a 501(c)(7) Social Club, and have a couple of questions.

Someone has suggested that the Guild sponsor a booth at one of the local fairs where members can choose to sell some of the things they have made, and donate some portion of the proceeds to the Guild. This seems allowable to me after reading Publication 557 since this would be income coming from the members and related to what we do. Does anyone see a problem with this that I'm not seeing?

We just donated 104 quilts to the local veteran's shelter, and someone who saw the quilts has asked if the Guild will make her a quilt that she would buy. That seems like business income to me, and would violate our exempt status. It has been suggested, however, that one of the members could make the quilt, sell it to this person, and donate a portion of the earnings or even all of it to the Guild. That seems like it might work since it is income derived from the activity around which we organize, similar to above, but I'm still thinking that having someone commission the work makes it more of a gray area. Anyone have any thoughts on that?

The publication only has just over a page around 501(c)(7) organizations, so I could use some advice on my questions above.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.