Corp. to non-profit-depreciation

[Gretel]

Maybe I am lucky and someone can guide me.

Group of people started a non-profit club and had business all year in 2007. Not applied for non-profit yet, so everything goes on 1120. They have send application to Secretary of State as non-profit.

They purchased assets which would need to depreciated using ADS if non-profit. Since not non-profit yet, on 1120 I could use 179. I wonder what will happen if they are recognized as non-profit in 2008 or 2009 and if expensing the assets has any bearing on a future 990.

The taxes they owe if they use ADS already is pretty much the same amount they would have to pay for the exempt application, for which they didn't have the money. I would hate to see them pay the taxes.

[Gretel]

I know it is a bad time for this type of question. Anyone has a wild guess or gut feeling?

[Gretel]

Form 1023 instructions

"If you file Form 1023 within 27 months after the end of the month in which you organization were legally formed, and we approve the application, the legal date of formation will be the effective date of your exempt status."

NSA helpline pointed this out to me but could not answer the question if the IRS then reimburses the organization for taxes paid on form 1120. Any help on this question??

[Gretel]

I have a lonely party here. Just wanted those interested to know that the IRS has a procedure in place to reimburse 1120 taxes paid, but it needs to be applied for.

[JG EA]

I have no idea what you are talking about because I don't do non profit tax returns, and it's March and I am in a constant state of panic. But I wanted to post to let you know you are a nice poster and I'm sure someone will search for information on your subject in the future and be grateful.

[Gretel]

I have no idea what you are talking about because I don't do non profit tax returns, and it's March and I am in a constant state of panic. But I wanted to post to let you know you are a nice poster and I'm sure someone will search for information on your subject in the future and be grateful.

Thank you for posting. I know what you mean by "constant state of panic". Even though, over the years (7 to be exact - so not many) I learned to deal this better. Good luck for the next 30 days.