Disolution of Non Profit Foundation

[bugtussellmom]

My boss started a nonprofit years ago. He doesn't have the money to hire someone to do the taxes and because it's a zero income year --- he thinks I should be able to read the instructions and do the return. I'm smart, but I'm NOT well versed in foundations or the accounting for a foundation. He wants this to be the final tax return.

I'm trying to understand what is the difference in "dissolution", "termination" and "liquidation".

There are no liabilities but there are assets...all donated by the founders (husband and wife).

Looking at the meaning of the three words in the dictionary really doesn't explain to me what he's supposed to do with the assets. I'm reading over the instructions for the 990PF (tax return) and I'm even more confused.

If anyone can help me I'll be forever grateful! This man thinks I'm a lawyer or something and I'm far from it. Reading this stuff is giving me a headache!

 

[timpgoetz]

This thread is a little dated, so this response is probably too late, but others may come across this same question, so here it goes.

When you first obtain tax exempt status as a nonprofit entity from the IRS, you indicate that if the nonprofit is ever dissolve, terminated, or liquidated, that all assets will go to a different nonprofit entity. This is because, in the year the assets were acquired by the nonprofit, the donor got a tax write-off. As such, those assets need to be used up by the nonprofit OR in your case, given to a different nonprofit to be used up.
So, I know this does not answer your question as to the difference between dissolution, termination and liquidation, but it seems the real question is what to do with the assets and whether or not the founder can have them back... NO, they need to stay within the nonprofit sector regardless of how the nonprofit winds down.

Tim Goetz