FundSvcs Community

 View Only

  • 1.  Legal donor of Professional Corporation (P.C.)

    Posted 11-08-2023 12:36 PM

    Hello Community! I have a question about who the legal donor is when we have a gift from a person who has made themselves a Professional Corporation (ex: <First Name> <Last Name> P.C.). My understanding is that while P.C.s are considered a "business", the business income must be reported on the individual's personal taxes and not separately. That leads me to think the legal donor is the Proprietor and not the P.C.

    Does this sound correct, or am I mistaken? I appreciate any help!!



    ------------------------------
    Ashley Ojeda
    University of Texas at Austin
    ashley.ojeda@austin.utexas.edu
    ------------------------------


  • 2.  RE: Legal donor of Professional Corporation (P.C.)

    Posted 11-08-2023 12:41 PM
    While it is true that some forms of corporations file on an individual tax return (but using a specific schedule), you cannot always know how anyone plans to file. This is why I think it is best to issue a receipt in the exact name found on the check.

    FWIW, my CPA prefers me to receive receipts in my LLC's name when I donate using my business account. That's more for record-keeping purposes, I know. But no harm is done issuing a receipt using the name on the check.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Legal donor of Professional Corporation (P.C.)

    Posted 11-08-2023 12:57 PM
    Something about the original email stuck in my head and so I researched further.

    A Professional Corporation is not the same as an LLC and they must file differently. So, you really do need to create a record for this PC and issue a receipt in its name.

    From LegalZoom:

    A PC must file a professional corporation tax return and pay taxes on its earnings. This is in contrast to LLCs or partnerships that have pass-through taxation, meaning the LLC members or partners pay tax on the profits of the company themselves and the company itself is not subject to direct taxation.

    PCs are subject to a 35% flat federal tax rate on their corporate earnings, which can be a disadvantage since C corporations are taxed at 15 to 34% for their earnings below $100,000. With an LLC or partnership, income is passed through to the members and partners who pay personal tax rates on the income, with rates between 10 and 35%.



    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


Related Content