The Priory

“The Priory is a recreational organization composed of members.”

“Members of The Priory annually elect four or five officers and Board members.”

“A majority (or greater) vote of the members is required for certain large financial matters, to install lighting equipment for athletic facilities, to amend or repeal a prohibition on the use of motor vehicles as transportation to or from the facility, or to remove large trees.”

“The completed Form 990 was e-mailed to the members of the Board and officers, with a request for comments and/or corrections.”

“The Priory considers requests for copies of its governing documents and financial statements from persons who submit a request at its mailing address.”

“The Priory's tennis pro rented tennis courts from the club to provide lessons to non-members of the club. The rental amount was a fixed percentage of the lesson fees from those lessons. If the payments to the club constitute unrelated business income, they do not constitute unrelated business taxable income. Chapter 4 of IRS Publication 598 provides: "Rents from real property, including elevators and escalators, are excluded in computing UBTI...The exclusion for rents doesn't apply if the amount of the rent depends on the income or profits derived by any person from the leased property, other than an amount based on a fixed percentage of the gross receipts or sales." (Page 10) Since the rental income to the club was for real property (tennis courts) and the rental amount was a fixed percentage of the gross receipts or sales from the rental (the lesson fees), the rental income is not taxable unrelated business income.”

“The Capital Stock was increased by $2000 to reflect the fact that the initial capital contributions by incoming members were $2000 greater than the total capital contributions that were returned to the departing members.”