Non Profit sale of property

[Duane Anderson]

Local fire stations set up a non profit corporation several years ago......They bought a piece of property adjacent to one of the fire stations to expand their parking. It had a small house on the property which the intent was to tear down and make a parking lot. Now some 10 years later they want to sell it...Is the gain taxable or reportable as a non profit. No improvements have been made to the property> Thanks,,,Duane Anderson

[Uncle Sam]

You've got a number of facts that have to be established in order to provide you with sound advice. It appears that you really need a competent attorney to sort this thing out and it's not merely
a simple yes/no tax decision.
What type of entity was established? A 501(c)(3)? 501(c)(4)? Makes a difference.
Was tax exempt entity status ever applied for via a Form 1023 or Form 1024? Were applicable Form 990 and appropriate state filings made.
In what name is the entity? A Fire District - which is a quasi governmental agency that provides fire protection to the community? Or in the name of a specific fire department which
is simply a group of firefighters that answer calls upon the fire whistle blowing and then come under the jurisdiction of the District?
The house on the property - was that ever used to conduct official fire business meetings or was it just left vacant? Was it ever used as a residence for anyone connected with the fire service?
In order to determine the disposition of the asset, you need to read the By-Laws of the organization to determine the proper procedure for disposition of assets - especially if considered public property -
state exempt organization law rules usually prevail. There could be Unrelated Business Taxable Income issues involved - but the facts as stated don't provide enough information.