Excess Benefit Transaction
/ɪkˈsɛs ˈbɛnɪfɪt ˈtrænzˌækʃən/
Definitions
- (n.) A transaction in which a tax-exempt organization provides an economic benefit to a disqualified person exceeding the value of the consideration received, resulting in tax penalties.
The IRS imposed penalties due to the nonprofit's excess benefit transaction with its executive.
Forms
- excess benefit transaction
- excess benefit transactions
Related terms
See also
Commentary
Crucial in nonprofit tax law, excess benefit transactions invoke intermediate sanctions aimed at preventing personal enrichment beyond fair market value.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.