Author Topic: Charity ? Business?  (Read 1103 times)

FrugalFisherman10

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Charity ? Business?
« on: December 13, 2016, 01:02:11 PM »
Friend of mine is a massage therapist in georgia and earns her living that way. I think it's set up as a small business but I'm not sure honestly how she's accepting payments for her services.

Here's what she's interested in doing that she has a question about.
She's about to buy a house and would like to be able to rent out a room or part of the house to a needy family for a reduced rate, primarily as a help to them (...as I'm sure this would not be an economical decision from a life-complication vs. Money received standpoint. She has a young son and having a needy family live with you will probably cost you more than the $100-300 bucks or so you may charge them each month. IMO)

Additionally, given her connections to other medical (and non-medical) related small time service providers (think Chiropractor, counseling, nutrition, general "wellness" type stuff), she has an idea/vision to create a network of those service providers that would be interested in and willing to provide their services to other needy families at reduced rates, (I presume by going outside of insurance or something like that.)

Questions: Should she start this as a charity/501c3?
- with the objectives of 1) providing low cost housing to one needy family at a time as well as 2) providing a resource/network of low cost services to this family and other families.
- Then maybe buying/donating the house (i.e. the mortgage ) under the charity. 
-Then maybe "renting" her son and herself a portion of the house,  and the needy family the rest of the house.  Charity: calls it rental income. Uses it to pay off mortgage. Takes mortgage interest deduction, etc.

Should she set it up as a business?: -similar to above but with different entity and tax considerations I'm sure.

Should she continue filing just as an individual?:
-consider the rent from the needy family as rental income ( or not if she doesn't mind trying to get away with that)?
-can't take difference between the rent she charges them and a 'reasonable rate' as a charitable contribution right
- Do the low cost provider network work pro Bono and probably not able to take any charitable deduction for it unless it's established as a charity.

Also if you have any CPA recommendations for her that would be great. I'm a CPA myself but this is not my area at all so I'm dangerous here and am trying to find her someone to talk to with some direction.

Thanks for any thoughts!

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