Can a dissolving corporation transfer or donate its remaining assets to another tax-exempt organization in order to qualify for a simplified dissolution?
No. If a dissolving corporation has remaining assets in excess of any reserve fund, it must either: (1) follow the procedures set forth in Article 10 of the N-PCL for the dissolution of a corporation with assets, or (2) seek court approval via N-PCL ”510 and 511 to sell or otherwise dispose of its remaining assets prior to filing a petition for a simplified dissolution. Grant-making private foundations can spend down their assets by making charitable grants to other tax-exempt organizations in the ordinary course of their operations. However, in order for a grant-making private foundation to transfer its assets to another private foundation, the dissolving foundation would need court approval either via an asset dissolution or a ”510/511 petition.
Related Questions
- If a client is entering a nursing home, can they transfer assets in order to qualify for Medicaid? Can they gift a home to a child or must they sell it?
- Can a corporation do a simplified dissolution if it has any remaining assets that require distribution to another tax-exempt organization?
- Can a Florida Non-Profit Corporation qualify as a tax-exempt charitable, religious, educational and scientific organization?
