Starting a nonprofit 501C3 in California and Tax reimbursement/write offs

Forum|Forum|1 year ago
February 13, 2025
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I had a question with regards to starting a Nonprofit Organization (501C3) in California. However, before doing so, I know it will cost around $1,500 to do so. My question is if I am the founder and providing all of the funds to start the Nonprofit, can I recover all of the start up costs ($1,500), or can I only recover some of the costs as a donation write off, since the Organization would not yet be a nonprofit 501C3 organization? I know there are laws in place to prevent "Founder profiting" from their own Nonprofit organizations, but I'm not sure if this would apply in this situation since this would only be to recover the costs of the startup. If I can only write them off as a tax deduction, then it won't work since my wife and I will not exceed $24,000 (std married Fed deductions) and I will have to ask a few other folks to help with the costs instead.

Thank you for your time,

Steve

PatriciaV

Employee

Once the not-for-profit receives donations and has cash available, you could request reimbursement of the start-up costs. It's unlikely this would be considered a personal benefit since the reimbursement is offset by the expense. Taking a salary, for instance, is a different matter.

Since this is not a tax question, you may wish to consult with a local attorney who is familiar with not-for-profit entities.

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