Non-Profit Organizations - Transferring money to new 501(c)(3)

USA Discussion in 'General Accountancy Discussion' started by Phil Kain, Jan 8, 2017.

  1. Phil Kain

    Phil Kain

    Jan 8, 2017
    Likes Received:
    A question for you about non-profit organizations. I’m hoping that you might be able to help provide an answer to this scenario:

    I’m on the board of a non-profit organization that historically has had 4 locations but only one 501(c)3 and one bank account. One of the locations spun out and will have a separate 501(c)3 and a separate bank account. The original 501(c)3 has funds in its bank account that are notionally divided up into 4 categories for the 4 locations. The original 501(c)3 wants to transfer the money that belongs to the location that is spinning out and opening its own bank account and will be a separate 501(c)3.

    The question is this: Is that money transfer from the original 501(c)3 to the new 501(c)3 considered as income to the new 501(c)3 and as an expense to the original 501(c)3?

    Thank you!!
    Phil Kain, Jan 8, 2017
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