Tax Information Package - SH-TXP4 - IRS Letter Grants 501d Classification
Tax Information Package - SH-TXP4
IRS Letter Grants 501d Classification
Internal Revenue Service Department of the Treasury
Washington, D.C. 20224
Sandhill Farm, Inc. Refer reply to: OP:E:EO:R:3
c/o Route 1, Box 10
Date: FEB. 1984
Rutledge, MO 63563
Employer Identification Number: 43-1191837
Internal Revenue Code Section: 501(d)
Key District: Chicago
Annual Accounting Period Ending: December 31
Based on the information supplied, and assuming your operations will be as stated in your application for recognition of exemption, we have determined you are exempt from Federal income tax under section 501(d) of the Internal Revenue Code.
You are required to file annually a return, Form 1065, stating specifically the items of your gross income and deductions and your net income, and attaching to such returns, as part thereof, a statement showing the distributive share of your net income. Your members must include as gross income in their individual income tax returns their pro rata share of the corporation's net income whether or not it was distributed to them.
If your sources of support, or your purposes, character, or method of operation is changed, you must let your key District Director know so that he can consider the effect of the change on your status. Also, you must inform him of all changes in your name and address.
In view of the fact that you are organized and operated on a communal basis and maintain a common treasury from which funds are withdrawn to support your members, it cannot be said that your receipts do not inure to the benefit of your members.
Therefore, contributions made to you are not deductible by the donors in computing their taxable income in the manner and to the extent provided by section 170 of the Code; amounts paid or permanently set aside by a trust or estate to or for your use are not deductible by the trust or estate in the manner and to the extent provided by section 642(c) of the Code; bequests, legacies, devises, or transfers to or for your use are not deductible in computing the value of the taxable estate of a decedent for Federal estate tax purposes in the manner and to the extent provided by sections 2055 and 2106 of the Code, and gifts of property to or for your use are not deductible in computing taxable gifts for Federal gift tax purposes in the manner and to the extent provided by section 2522 of the Code.
This ruling is predicated on the fact that your primary sources of income will continue to emanate from your farm operations, other trade or business activities, and member contributions. Earnings from the outside employment of your members are not considered appropriate sources of income for purposes of the above. In this regard, see Revenue Rulings 78-100, 1978-1 C.B. 162 and 80-332, 1980-2 C.B. 34, enclosed.
Please continue to use your employer identification number on all returns which you file and in all correspondence with the Internal Revenue Service.
We are forwarding a copy of this letter to your key District Directory. Please keep this ruling in your permanent records.
Chief, Exempt Organizations