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@rpavuluri: If at any point you were to move forward with white labeling and selling that, I would recommend you consult a lawyer about whether the IRS would co
by jchung 8y ago
@rpavuluri: If at any point you were to move forward with white labeling and selling that, I would recommend you consult a lawyer about whether the IRS would consider this unrelated business taxable income (UBTI). Too much UBTI can put your 501c3 status at risk. IANAL / IANYL / YMMV / etc.
- fanzhang 8y agoI think generally UBTI refers to income that is actually unrelated to the good the nonprofit purports to do. For example, Princeton a nonprofit can totally charge tuition and use it as a base of funding, and not pay taxes on that. They can even sell their students food in cafeteria and not pay income tax. [1] But they can't start a food franchise and not pay tax. This software seems clearly within their registration statement. Now if they started selling software consulting as their major source of funding... In any case, I agree checking with your accountant is the best. [1] https://fms.iu.edu/tax/ubit/ https://fms.iu.edu/tax/ubit/
- rpavuluri 8y agoThanks for the tips. We will definitely consult professionals for their advice.