Description
Book SynopsisEffective strategies for non-profit entities in a profit-based world
Joint Ventures Involving Tax-Exempt Organizationsexamines the procedures, rules, and regulations surrounding joint ventures and partnerships, emphasizing tax-exempt status preservation. Revised and updated to align with current 2017 Tax Act, this supplement offers expert interpretation and practical guidance to professionals seeking a complete reference, including an analysis of impact of the siloing of the UBIT rules, the new Opportunity Zone Funds which will incentivize investors in designated census tracts, inter alia. Sample documents enable quick reference and demonstrate real-world application of new laws and guidelines. The discussion delves into planning strategies that can be applied to joint ventures and partnerships while maintaining tax-exempt status, and which joint ventures are best suited for a particular organization.
Widely accepted business strategies for profit-
Table of Contents
Preface xi
Acknowledgments xv
Chapter 1: Introduction: Joint Ventures Involving Exempt Organizations 1
1.4 University Joint Ventures 1
1.5 Low-Income Housing and New Markets Tax Credit Joint Ventures 1
1.6 Conservation Joint Ventures 2
1.8 Rev. Rul. 98-15 and Joint Venture Structure (New) 2
1.10 Ancillary Joint Ventures: Rev. Rul. 2004-51 2
1.14 The Exempt Organization as a Lender or Ground Lessor 2
1.15 Partnership Taxation 3
1.17 Use of a Subsidiary as a Participant in a Joint Venture 3
1.22 Limitation on Private Foundation’s Activities That Limit Excess Business Holdings 4
1.24 Other Developments 4
Chapter 2: Taxation of Charitable Organizations 5
2.1 Introduction (Revised) 5
2.2 Categories of Exempt Organizations 10
2.3 § 501(c)(3) Organizations: Statutory Requirements (Revised) 12
2.6 Application for Exemption (Revised) 13
2.7 Governance (Revised) 20
2.8 Form 990: Reporting and Disclosure Requirements 21
2.10 The IRS Audit 22
2.11 Charitable Contributions 26
Chapter 3: Taxation of Partnerships and Joint Ventures 33
3.1 Scope of Chapter (New) 33
3.3 Classification as a Partnership 36
3.4 Alternatives to Partnerships 36
3.7 Formation of Partnership (New) 36
3.8 Tax Basis in Partnership Interest (Revised) 37
3.9 Partnership Operations 37
3.11 Sale or Other Disposition of Assets or Interests (Revised) 38
3.12 Other Tax Issues (Revised) 39
Chapter 4: Overview: Joint Ventures Involving Exempt Organizations 43
4.1 Introduction (New) 43
4.2 Exempt Organization as General Partner: A Historical Perspective (Revised) 44
4.6 Revenue Ruling 2004-51 and Ancillary Joint Ventures 46
4.9 Conversions from Exempt to For-Profit and from For-Profit to Exempt Entities 46
4.10 Analysis of a Virtual Joint Venture 47
Chapter 5: Private Benefit, Private Inurement, and Excess Benefit Transactions 49
5.1 What Are Private Inurement and Private Benefit? 49
5.2 Transactions in Which Private Benefit or Inurement May Occur 50
5.3 Profit-Making Activities as Indicia of Nonexempt Purpose 51
5.4 Intermediate Sanctions (Revised) 51
5.7 State Activity with Respect to Insider Transactions 53
Chapter 6: Engaging in a Joint Venture: The Choices 55
6.1 Introduction (New) 55
6.2 LLCs 56
6.3 Use of a For-Profit Subsidiary as Participant in a Joint Venture (Revised) 56
6.5 Private Foundations and Program-Related Investments (Revised) 60
6.6 Nonprofits and Bonds 64
6.7 Exploring Alternative Structures 66
6.8 Other Approaches (Revised) 67
Chapter 7: Exempt Organizations as Accommodating Parties in Tax Shelter Transactions 71
7.2 Prevention of Abusive Tax Shelters 71
7.3 Excise Taxes and Penalties 72
Chapter 8: The Unrelated Business Income Tax 73
8.1 Introduction 73
8.3 General Rule (Revised) 74
8.4 Statutory Exceptions to UBIT (New) 75
8.5 Modifications to UBIT (New) 75
8.7 Calculation of UBIT (New) 75
Chapter 9: Debt-Financed Income 81
9.1 Introduction 81
9.2 Debt-Financed Property (Revised) 81
9.6 The Final Regulations 82
Chapter 10: Limitation on Excess Business Holdings 85
10.1 Introduction 85
10.2 Excess Business Holdings: General Rules (Revised) 85
10.3 Tax Imposed 86
10.4 Exclusions (Revised) 86
Chapter 12: Healthcare Entities in Joint Ventures 89
12.1 Overview (New) 89
12.2 Classifications of Joint Ventures 90
12.3 Tax Analysis (Revised) 90
12.4 Other Healthcare Industry Issues 93
12.5 Preserving the 50/50 Joint Venture (Revised) 93
12.9 Government Scrutiny 94
12.11 The Patient Protection and Affordable Care Act of 2010: 501(r) and Other Statutory Changes Impacting Nonprofit Hospitals 94
12.12 The Patient Protection and Affordable Care Act of 2010: ACOs and Co-Ops: New Joint Venture Healthcare Entities 97
Chapter 13: Low-Income Housing, New Markets, Rehabilitation, and Other Tax Credit Programs 99
13.3 Low-Income Housing Tax Credit (Revised) 99
13.4 Historic Investment Tax Credit 100
13.6 New Markets Tax Credits (Revised) 104
13.10 The Energy Tax Credits 120
13.11 The Opportunity Zone Funds: New Section 1400Z-1 and Section 1400Z-2 (New) 121
Chapter 14: Joint Ventures with Universities 131
14.1 Introduction (New) 131
14.5 Faculty Participation in Research Joint Ventures 136
14.6 Nonresearch Joint Venture Arrangements 136
14.7 Modes of Participation by Universities in Joint Ventures (Revised) 137
Chapter 15: Business Leagues Engaged in Joint Ventures 141
15.1 Overview (Revised) 141
15.2 The Five-Prong Test 142
15.3 Unrelated Business Income Tax 142
Chapter 16: Conservation Organizations in Joint Ventures 143
16.1 Overview 143
16.2 Conservation and Environmental Protection as a Charitable or Educational Purpose: Public and Private Benefit (Revised) 143
16.3 Conservation Gifts and 170(h) Contributions (Revised) 144
16.7 Emerging Issues (Revised) 156
Chapter 17: International Joint Ventures 159
17.5 General Grantmaking Rules 159
17.11 Application of Foreign Tax Treaties (Revised) 160
Chapter 19: Debt Restructuring and Asset Protection Issues 163
19.1 Introduction (New) 163
19.2 Overview of Bankruptcy (Revised) 163
19.3 The Estate and the Automatic Stay (Revised) 164
19.4 Case Administration (Revised) 165
19.5 Chapter 11 Plan (Revised) 165
19.6 Discharge (New) 166
Index 167
