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Exempt Organization

ljhyer
Level 3

I have a 501(c)12 client who files a 990 federal exempt org return and for the past 15+ years has been filing not a CA state 109 or 199 but a CA State corp return form 100 and paying the minimum $800 fee every year? Does this make any sense? What am I missing here? It's not a HOA, its a mutual road & well maintenance for a group of homeowners off grid. The statement of Information lists it as a CA nonprofit/cooperative corp.

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ljhyer
Level 3

Well, I just got my answer and can't say I'm too delighted about it but at least the mystery is solved.  It seems that the client cannot get CA exempt status due to the fact that they charge members for water based upon usage rather than a flat fee so they have to file a  CA Corp return and a Federal Exempt return.

There is no way to generate a CA corp return in Lacerte's Exempt module AND there is no way to generate a CA corp return without a Federal corporate return so........... looks like I'm going to have to prepare the return twice....  with over 50 depreciable assets!!  

Not having fun in this tax office today ;-(

 

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6 Comments 6
George4Tacks
Level 15

Is the organization registered with CA? http://rct.doj.ca.gov/Verification/Web/Search.aspx?facility=Y

There is also an annual RRF-1 that might be needed to file. 

Exempt is not my real strong suit, but it seems prior years with the 100 are probably incorrect.

I did find https://www.ftb.ca.gov/forms/misc/927.html#927-11

Mutual ditch or irrigation companies

California does not have a comparable section under R&TC Section 23701. R&TC Section 24405 may apply for exclusion of membership income.They may be exempt under IRC Section 501(c)(12).

 

That may explain why they might not have filed for CA exemption. 


Here's wishing you many Happy Returns
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ljhyer
Level 3

Thank you so much for your input, you've given me a lot of information to reveiw!!  It's still a work in progress.

George4Tacks
Level 15
I went to a very informative one day workshop on Exempt Organizations. I left muttering "Never Again!"
I try really hard to be good at what I do and that area was just too random and foreign to what my practice was that I thereafter referred those clients that enjoyed and hopefully properly prepared that type of return.
Good luck.

Here's wishing you many Happy Returns
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ljhyer
Level 3

Well, I just got my answer and can't say I'm too delighted about it but at least the mystery is solved.  It seems that the client cannot get CA exempt status due to the fact that they charge members for water based upon usage rather than a flat fee so they have to file a  CA Corp return and a Federal Exempt return.

There is no way to generate a CA corp return in Lacerte's Exempt module AND there is no way to generate a CA corp return without a Federal corporate return so........... looks like I'm going to have to prepare the return twice....  with over 50 depreciable assets!!  

Not having fun in this tax office today ;-(

 

George4Tacks
Level 15
Be sure to charge appropriately.
You can export depreciable assets from one module and then import to the other.
https://proconnect.intuit.com/community/help-articles/help/exporting-depreciation-data-to-a-file/00/...


Here's wishing you many Happy Returns
ljhyer
Level 3

Thanks George!!!!!