I write and publish educational and how-to books for kids through my for-profit publishing house. I also founded and run a nonprofit that promotes reading. Can my nonprofit purchase my newest book and sell it? It is the first in a planned series about being an author.
If your nonprofit is a private foundation, a purchase of anything from you would be an act of self-dealing, with significant adverse tax consequences for you and any board member of the foundation who approved the transaction. (See Ready Reference Page: “Private Foundations Must Avoid Self-Dealing”)
If your nonprofit is a public charity, you have a lot more leeway. The public charity can purchase your book and the others in the series so long as the price is fair, reasonable and not an excess benefit. (See Ready Reference Page: “Charities Must Avoid Excess Benefit Transactions”) You do need to avoid the question whether you are using the charity to promote your work in a way that provides you an improper benefit by increasing your wealth and particularly your fame. I don’t suspect that this claim is likely, however.
For the public charity, the question is whether the sale of the book(s) is related to the charitable purpose for which it is exempt or whether it produces unrelated business taxable income that will generate unrelated business income tax. If you think it might be unrelated to your exempt purpose, you should notify the IRS that you are undertaking a new line of business on your next Form 990 tax information return filing. That appears to be the only way to expand your exempt purpose these days since the IRS will not send you a separate letter confirming that a new activity is okay.
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