We have recently seen an increasing number of transactions involving the sale of charitable assets to for-profit entities. While generally permissible if conducted properly, these sales raise a number of legal issues at both the federal and state levels that must be considered. Where the transaction is motivated in part by the desire to further the exempt purposes of the selling nonprofit, and not just by pure financial considerations, the analysis can be particularly complex.
In The Sale of Charitable Assets to a For-Profit to Further Exempt Purposes: The Legal Considerations, published in the March/April 2018 issue of Taxation of Exempts, Erin addresses some of the general legal issues that can be trased in such transactions. The article is available for download at the link below.