Can Property of a Non-Profit Be Leased to a For-Profit Business in Illinois?
Full Question:
Answer:
The answer will depend on all the circumstances involved, such as the powers granted in the bylaws. Generally, property must be used exclusively for charitable or other enumerated purposes to be tax-exempt.
For further discussion, please see:
http://www.cga.ct.gov/2004/rpt/2004-R-0681.htm
Please see the following IL statute:
805 ILCS 105/103.12 (from Ch. 32, par. 103.12)
Sec. 103.12. Private foundations — Federal tax laws. In the absence of an
express provision to the contrary in its articles of incorporation, a
corporation, as defined in Section 509 of the Internal Revenue Code of
1986, as may be amended from time to time, during the period it is a
private foundation:
(a) Shall not engage in any act of self-dealing as defined in
Section 4941(d) thereof;
(b) Shall distribute its income for each taxable year at such time and in
such manner as not to become subject to the tax on undistributed income
imposed by Section 4942 thereof;
(c) Shall not retain any excess business holdings as defined in
Section 4943(c) thereof;
(d) Shall not make any investment in such manner as to subject it to tax
under Section 4944 thereof;
(e) Shall not make any taxable expenditure as defined in Section 4945(d)
thereof.
