Exempt organizations - Uncle Fed's Tax*Board

Exempt organizations
tion. G.C.M. 13067 superseded. §1.501(c)(7)-1
(Sec. 501, ’86 Code.)
Rev. Rul. 67-428, 1967–2 C.B. 204.
218.580 Social clubs; fees paid to members.
An exempt social club may pay a reasonable fixed
fee to members who bring in new members to the
club without disqualifying the club from exemption.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 80-130, 1980-1 C.B. 117.
218.581 Social clubs; flying club. A flying club
of limited membership that provides flying privileges
solely for its members, assesses dues based
on the club’s fixed operating costs and charges
fees based on variable operating expenses, and
whose members are interested in flying as a hobby,
constantly comingle in informal meetings, maintain
and repair the aircraft owned by the club, and
fly together in small groups qualifies for exemption.
Rev. Rul. 70-32 distinguished.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 74-30, 1974-1 C.B. 137.
218.582 Social clubs;flying club. A flying club
providing economical flying facilities for its
members but having no organized social or recreational
program does not qualify for exemption.
Distinguished by Rev. Rul. 74-30.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 70-32, 1970-1 C.B. 132.
218.583 Social clubs; gaming devices. The
operation of gaming devices by a nonprofit club
for the pleasure of its members and guests does not
affect the club’s exempt status, even though the
operation of gaming devices is illegal under local
law. §1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 69–68, 1969-1 C.B. 153.
218.584 Social clubs; golf course open to general
public. A social club that regularly holds its
golf course open to the public for use upon payment
of established green fees and uses this
income for the maintenance and improvement of
club facilities does not qualify for exemption.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 69–219, 1969–1 C.B. 153.
218.585 Social clubs; golf tournament. A
country club that annually hosts a golf tournament
to which the general public is admitted for a charge
and uses the net income therefrom for club purposes
does not qualify for exemption.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 68–638, 1968-2 C.B. 220.
218.586 Social clubs; gross receipts from nonmembers;
information returns. Guidelines are
set forth for determining the effect of gross
receipts derived from nonmember use of a social
club’s facilities on the club’s exempt status in the
examination of annual information returns. Forms
990 and 990T. Recordkeeping requirements when
nonmembers use a club’s facilities and circumstances
under which a host-guest relationship will
be assumed are set forth. Rev. Proc. 64–36 superseded.
§§1.501(c)(7)-1, 1.512(a)-1. (Sec.
601.105, S.P.R.; Secs. 501, 512, ’86 Code.)
Rev. Proc. 71-17, 1971–1 C.B. 683.
218.587 Social clubs; home associations; recreational
and nonrecreational facilities. A club
providing social and recreational facilities, whose
membership is limited to homeowners of a housing
development, will be precluded from qualifying
for exemption by owning and maintaining residential
streets, enforcing restrictive covenants, or
providing residential fire and police protection
and trash collection service. §1.501(c)(7)-1. (Sec.
501, ’86 Code.)
Rev. Rul. 75-494, 1975-2 C.B. 214.
218.588 Social clubs; home associations; recreational
facilities. A club operating social facilities,
including a swimming pool, providing exclusive
and automatic membership to home owners in
a housing development, with no part of its earnings
inuring to the benefit of any member, may
qualify for exemption, even though it contracts
with the housing developer for the construction of
its recreational facilities. §1.501(c)(7)-1. (Sec.
501, ’86 Code.)
Rev. Rul. 69-281, 1969-1 C.B. 155.
218.589 Social clubs; income derived from
fees for service. An organization formed by several
individuals to operate a health and recreation
al club, but whose predominant activity is selling
services for profit to an unlimited number of socalled
members who have no voice in the management
of the club and whose only rights are to use
the club’s facilities upon the payment of specified
fees, is not a social club entitled to exemption.
§1.501(c)(7)1. (Sec. 501, ’86 Code.)
Rev. Rul. 58-588, 1958-2 C.B. 265.
218.590 Social clubs; income from investments.
A social club is not exempt where it regularly
derives a substantial part of its income from
nonmember sources, such as dividends and interest
on investments which it owns. However, the
right of a social club to exemption is not affected
by the fact that for a relatively short period a substantial
part of its income is derived from investment
of the proceeds of the sale of its former clubhouse
pending the acquisition of a new clubhouse.
I.T. 3302 superseded. §1.501(c)(7)-1. (Sec. 501,
’86 Code.)
Rev. Rul. 66-149, 1966-1 C.B. 146.
218.591 Social clubs; leasing lots to members.
A non profit organization that leases building lots
to its members on a long-term basis is not exempt.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 68-168, 1968-1 C.B. 269.
218.592 Social clubs; liquor sold for consumption
off premises. A social club that regularly
sells liquor for consumption off its premises
is not entitled to exemption. Rev. Rul. 44 distinguished.
Not applicable with respect to sales of
liquor prior to 1969. §§1.501(c)(7)-1,
301.7805-1. (Secs. 501, 7805; ’86 Code.)
Rev. Rul. 68-535, 1968-2 C.B. 219.
218.593 Social clubs; management and lease
agreement. A social club which entered into a
management and lease agreement for the management
and operation of its facilities by the lessor
may be exempt where the club retains control over
the selection of its membership, the initiation fees
and dues, has an option to purchase the property
leased by the club, and can terminate the agreement.
Rev. Rul. 65–219 distinguished.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 67-302, 1967-2 C.B. 203.
218.594 Social clubs; operating meeting
place. An organization which owns and operates
a building and conducts club activities for the
benefit of a tax exempt lodge may itself be exempt
as a social club. §1.501(c)(7)-1. (Sec. 501, ’86
Code.)
Rev. Rul. 56-305, 1956-2 C.B. 307.
218.595 Social clubs; operation of bar or restaurant.
A social club should not be denied
exemption because it derives its principal income
from the operation of a bar or restaurant, provided
that only members and their guests are permitted
the use of the club’s facilities. Distinguished by
Rev. Rul. 68-535. §29.101(9)-1. (Sec. 101, ’39
Code; Sec. 501, ’86 Code.)
Rev. Rul. 44, 1953-1 C.B. 109.
218.596 Social clubs; political membership.
A nonprofit social club composed of persons who
are members of a particular political party and persons
interested in the affairs of such party may be
exempt even though it occasionally invites political
candidates to address its members.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 68-266, 1968-1 C.B. 270.
218.597 Social clubs; providing facilities for
exempt parent. A subsidiary of a veteran’s organization
which holds title to a building housing its
parent, which is exempt under section 501(c)(4),
maintains the building, and operates the social
facilities located in the building, does not qualify
for exemption under section 501(c)(2) or
501(c)(4), but does qualify for exemption under
section 501(c)(7). §§1.501(c)(2)-1,
1.501(c)(4)-1, 1.501(c)(7)-1. (Sec. 501, ’86
Code.)
Rev. Rul. 66-150, 1966-1 C.B. 147.
218.598 Social clubs; redemption of member’s
stock. The exempt status of asocial club will
not be adversely affected where it redeems certain
members’ stock at the book value of the shares at
the time of redemption, even though the stockholder
may realize gain therefrom.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 68-639, 1968–2 C.B. 220.
218.599 Social clubs; rental of property. A
social club that receives a substantial portion of its
income from the rental of property to commercial
tenants and uses this income to defray operating
expenses and to improve and expand the facilities
does not qualify for exemption. G.C.M. 20647
superseded. §1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 69-220, 1969-1 C.B. 154.
218.600 Sociat clubs; sale and distribution of
liquidated assets. Where an exempt social club
finds it impracticable to conduct its exempt activities
and, as a result, sells its property and liquidates,
such sale is incidental to its exempt purposes
and the club is still considered as operated
exclusively for pleasure, recreation and similar
purposes up through the date of the sale and distribution
of the liquidated assets to its active members.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 58-501, 1958-2 C.B. 262.
218.601 Social clubs; sale of property. Three
situations illustrate the application of the following
concepts that were considered in determining
the effect of the sale of property on the exempt status
of a social club: (1) the purpose of the club in
purchasing the property; (2) the use the club
makes of the property; (3) the reasons for the sale;
and (4) the method used in making the sale.
§1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 69–232, 1969-1 C.B. 154.
218.602 Social clubs; sports car events. A
nonprofit organization which, in conducting
sports car events for the pleasure and recreation of
its members, permits the general public to attend
such events for a fee on a recurring basis and solicits
patronage by advertising, does not qualify for
exemption §1.501(c)(7)-1. (Sec. 501, ’86 Code.)
Rev. Rul. 65-63, 1965–1 C.B. 240.
218.603 Social clubs; stock car organization.
A nonprofit corporation formed to promote interest
in stock cars, that conducts racing events in
cooperation with community organizations under
agreements permitting part of the proceeds to be
paid to members participating in the races, does
not qualify for exemption. §1.501(c)(7)-1. (Sec.
501, ’86 Code.)
Rev. Rul. 56-475, 1956-2 C.B. 308.
218.604 Social clubs; swimming club. A
swimming club which is operated under an agreement
with its resident agent whereby he controls
the size of the club membership, the amounts of
initiation fees and annual club dues, and retains all
initiation fees and ninety percent of dues and
transfer fees in return for the exclusive use of the
swimming pool which he owns and operates is a
commercial venture operated for the agent’s bene-