Date: Thu, 19 Apr 2001 21:59:18 -0400 From: "Thomas M. Sommers" <tms2@mail.ptd.net> To: freebsd-chat@FreeBSD.ORG Subject: Re: Stallman now claims authorship of Linux Message-ID: <3ADF97F6.6128552F@mail.ptd.net> References: <4.3.2.7.2.20010418003011.045ef3b0@localhost> <4.3.2.7.2.20010418064119.04710720@localhost> <4.3.2.7.2.20010418215113.04440410@localhost>
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Brett Glass wrote: > > At 11:06 AM 4/18/2001, Thomas M. Sommers wrote: > > >It's not at all clear that selling free software is an "unrelated" > >business for the FSF (26 USC 513). > > They're not selling the software; they're selling copies of it. A distinction without a difference for purposes of the present discussion. The create software, and sell (copies of) it. Sounds related to me. > And, yes, it is unrelated business income. The "business" of a charity > is not to sell things but to help those in need. The FSF does not > target its efforts at the needy 26 USC 501(c)(3) is not limited to charitable organizations. > and makes more than half of its > income from the sale of goods. Hence, it is not a legal 501(c)(3). 26 USC 501(b), entitled "Tax on unrelated business income and certain other activities", reads: "An organization exempt from taxation under subsection (a) shall be subject to tax to the extent provided in parts II, III, and VI of this subchapter, but (notwithstanding parts II, III, and VI of this subchapter) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes." No mention of any limits on income there; the organization just has to pay tax. If you were correct, then many organizations would lose their tax-exempt status. The US Golf Association, just to take one example, would quickly lose its tax-exempt status, because it brings in tons of money from TV. > > Even if it were, the FSF would just > >have to pay the tax on the income; it would not lose its status (26 USC > >511). > > Again, if it derives more than half of its income from unrelated business > activities rather than donations, it loses its status. See IRS Publication > 577. I've skimmed the publication (and it's 557, not 577), and have found nothing to support your claim. The statute clearly does not support you. Provide a more precise citation. To Unsubscribe: send mail to majordomo@FreeBSD.org with "unsubscribe freebsd-chat" in the body of the message
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