Limited Liability Companies as Exempt Organizations

Abstract:     
The use of limited liability companies and exempt organizations has exploded over recent years. The combination of the two types of entities raise tax issues that deserve close attention. In particular, limited liability companies raise three issues in the exempt organization context. First, can a limited liability company be disregarded if part of an exempt organization? Second, can a limited liability company be an exempt organization? Do contributions to disregarded limited liability companies wholly owned by exempt organizations qualify for the 170 charitable contribution deduction? This article addresses each of those questions based upon the limited guidance in this area. As limited liability companies become a larger part of business operations and property ownership, more guidance will undoubtedly be required to further address the three questions.

Number of Pages in PDF File: 4

Keywords: tax-exempt organization, limited liability company, choice of entity, section 501(c)(3)

JEL Classification: H25

Accepted Paper Series