Washington - Organizations that provide seller-funded down-payment assistance to home buyers do not qualify as tax-exempt charities, the Internal Revenue Service said in a recent ruling.
Down-payment-assistance programs provide cash to homebuyers who can't afford to make the minimum down payment or pay the closing costs involved in obtaining a mortgage. Such programs can qualify as tax-exempt charitable and educational organizations in some instances. In Revenue Ruling 2006-27, the agency provides a detailed discussion of guidelines on how to meet the tests for exemption, along with a trio of examples.
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