Fixed Assets given to officers upon dissolution

[Penelope]

A NON-PROFIT organization (a Union Local) is being dissolved as of 11-30-2010. The computers, copy machines and some office furniture with combined net book value of about $15,000 is being given to officers.

Shouldn't the net book value of assets each received upon the dissolution be added to each officers W-2....?

I know they will object, of course.

TIA.

Edited to add something important: How is the loss on disposal reported on the final 990 tax return. Does it go through the 4797, like a FOR-profit?

[ted m]

The officers biggest concern should be how the DOL would view the Local giving computers, etc. to the officers. A Local I work with sold a car in secret bidding that was open to all members and possibly others. The DOL LM form has a question regarding any assets disposed other than by sale. Both the DOL LM and 990 form require information regarding compensation to officers. I would show the loss on disposal as an expense, no 4797.

[Penelope]

Union position: They tried to sell assets without success

Thanks for the feedback. The Union position is that the assets had no market value, thus there is no compensation. Net Book Value is not the same as market value. This same position would apply to the 990.

Officers claim that no further LM-2 is due for the activity after year end but before dissolution The LM-2 filed for prior fiscal year was marked as "Final."

Not sure how this will fly. The Union have been warned that it might not.