The secret workaround to qualify for the 501c3 Non-Profit LLC Tax Designation

Can an LLC qualify for a 501c3 tax exemption determination?

Yes and no.

"501c3" is a tax designation granted by the IRS to qualifying non-profit entities. The most typical type of non-profit entity is a "Non-Profit Corporation," a specific type of entity that you can form in any state.

Non-Profit Corporations can be granted 501c3 status by the IRS. The problem is that there is currently no such entity as a "Non-Profit LLC," and as such an LLC cannot itself obtain 501c3 status. 

If you are determined to have an LLC as part of a non-profit organization, there is a workaround if all of the following are true:

1. the LLC is owned 100% by a Non-Profit Corporation
2. the LLC's managers are the same people who serve on the board of directors of the Non-Profit Corporation
3. the LLC Operating Agreement adheres to the bylaws and restrictions of its parent Non-Profit Corporation

If all of those requirements are met, then charitable donations to the LLC will be considered charitable donations to the Non-Profit Corporation and tax-deductible through the Non-Profit Corporation's 501c3 status.