Legal Question in Real Estate Law in Louisiana

Re: Real estate / non profit

It sounds like they are going to want to use your tax status to avoid paying capital gains and other taxes on property they purchase and sell, then pay you for using your status. If that is the case, you are likely involving yourself in a tax fraud scheme.

The question "who will be liable if any thing [sic] happens" is YOU and the "real estate investment company."

Before you agree to this "scheme," I strongly suggest that you have an attorney with a background in tax law and possibly a CPA review this matter. Spending a few dollars before you involve youself in a scheme to defraud the taxing authorities will be well worth the tens of thousands you may later spend defending yourself when you are prosecuted for tax fraud.

Re: Real estate / non profit

I can't comment on how Louisiana law would affect this proposed deal; Louisiana has the only legal system in the U.S. that is based on Roman or so-called "Civil Law" as used on the Eurorean Continent, whereas English or "Common Law" is the basis of the law of the other 49 states. So, things in Louisiana tend to be very different from the rest of the U.S.

On the other hand, this proposal would endanger your 501(c)(3) or similar tax-exempt status under Federal law, namely the Internal Revenue Code. Nonprofits are quite limited in what they can do in the way of "sideline" businesses that generate profits. The most likely problem here is that if the land were sold later for a profit, the nonprofit could not distribute that profit as dividends or excessive salaries withoit committing tax fraud.

There is no law preventing nonprofits from acquiring land, but the law does not allow them to do so for the ultimate benefit of any particular persons. Nonprofit property must be devoted to nonprofit purposes in perpetuity.