Joint Ventures Involving Tax-Exempt Organizations 2021 cumulative plement

by Sanders, Michael I.

• ISBN13: 9781119985204
• ISBN10: 111998520X
• Edition: 4th
• Format: Paperback
• Copyright: 2022-12-28
• Publisher: Wiley

Summary

A comprehensive, revised, and expanded guide covering tax-exempt organizations engaging in joint ventures

Joint Ventures Involving Tax-Exempt Organizations, Fourth Edition examines the liability of, and consequences to, exempt organizations participating in joint ventures with for-profit and other tax-exempt entities. This authoritative guide provides unbridled access to relevant IRC provisions, Treasury regulations, IRS rulings, and pertinent judicial decisions and legislative developments that impact exempt organizations involved in joint ventures.

• Features in depth analysis of the IRS's requirements for structuring joint ventures to protect a nonprofit's exemption as well as to minimize UBIT
• Includes sample models, checklists, and numerous citations to Internal Revenue Code sections, Treasury Regulations, case law, and IRS rulings
• Presents models, guidelines, and suggestions for structuring joint ventures and minimizing the risk of audit
• Contains detailed coverage of: new Internal Revenue Code requirements impacting charitable hospitals including Section 501(r) and related provisions; university ventures, revised Form 990, with a focus on nonprofits engaged in joint ventures; the IRS's emphasis on good governance practices; international activities by nonprofits; and a comprehensive examination of the New Market Tax Credits and Low Income Housing Tax Credits arena

Written by a noted expert in the field, Joint Ventures Involving Tax-Exempt Organizations, Fourth Edition is the most in-depth discussion of this critical topic.

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 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 9

§ 2.1 Introduction 9

§ 2.2 Categories of Exempt Organizations (Revised) 15

§ 2.3 § 501(c)(3) Organizations: Statutory Requirements 19

§ 2.4 Charitable Organizations: General Requirements 22

§ 2.5 Categories of Charitable Organizations (New) 23

§ 2.6 Application for Exemption 25

§ 2.7 Governance 34

§ 2.8 Form 990: Reporting and Disclosure Requirements (Revised) 35

§ 2.9 Redesigned Form 990 (New) 37

§ 2.10 The IRS Audit (Revised) 37

§ 2.11 Charitable Contributions (Revised) 42

Chapter 3: Taxation of Partnerships and Joint Ventures 53

§ 3.1 Scope of Chapter 53

§ 3.3 Classification as a Partnership (Revised) 56

§ 3.4 Alternatives to Partnerships 70

§ 3.7 Formation of Partnership 70

§ 3.8 Tax Basis in Partnership Interest 70

§ 3.9 Partnership Operations 71

§ 3.10 Partnership Distributions to Partners 72

§ 3.11 Sale or Other Disposition of Assets or Interests 72

§ 3.12 Other Tax Issues 73

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Contents

▪ viii ▪

Chapter 4: Overview: Joint Ventures Involving Exempt Organizations 79

§ 4.1 Introduction 79

§ 4.2 Exempt Organization as General Partner: A Historical

Perspective 80

§ 4.6 Revenue Ruling 2004-51

and Ancillary Joint Ventures 82

§ 4.9 Conversions from Exempt to For-Profit

and from For-Profit

to Exempt Entities 82

§ 4.10 Analysis of a Virtual Joint Venture 82

Chapter 5: Private Benefit, Private Inurement, and Excess Benefit

Transactions 85

§ 5.1 What Are Private Inurement and Private Benefit? 85

§ 5.2 Transactions in Which Private Benefit or Inurement May Occur 87

§ 5.3 Profit-Making

Activities as Indicia of Nonexempt Purpose 89

§ 5.4 Intermediate Sanctions (Revised) 89

§ 5.7 State Activity with Respect to Insider Transactions 99

Chapter 6: Engaging in a Joint Venture: The Choices 101

§ 6.1 Introduction 101

§ 6.2 LLCs 102

§ 6.3 Use of a For-Profit

Subsidiary as Participant in a Joint Venture

(Revised) 103

§ 6.5 Private Foundations and Program-Related

Investments

(Revised) 115

§ 6.6 Nonprofits and Bonds 120

§ 6.7 Exploring Alternative Structures (Revised) 122

§ 6.8 Other Approaches 126

Chapter 7: Exempt Organizations as Accommodating Parties

in Tax Shelter Transactions 135

§ 7.2 Prevention of Abusive Tax Shelters 135

§ 7.3 Excise Taxes and Penalties 136

Chapter 8: The Unrelated Business Income Tax 137

§ 8.1 Introduction 137

§ 8.3 General Rule 138

§ 8.4 Statutory Exceptions to UBIT 139

§ 8.5 Modifications to UBIT 140

§ 8.7 Calculation of UBIT 140

Chapter 9: Debt-Financed

Income 157

§ 9.1 Introduction 157

§ 9.2 Debt-Financed

Property 157

§ 9.3 The §514(c)(9) Exception (New) 158

§ 9.6 The Final Regulations 158

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Contents

▪ ix ▪

Chapter 10: Limitation on Excess Business Holdings 161

§ 10.1 Introduction 161

§ 10.2 Excess Business Holdings: General Rules (Revised) 161

§ 10.3 Tax Imposed 163

§ 10.4 Exclusions (Revised) 164

Chapter 11: Impact on Taxable Joint Ventures: Tax-Exempt

Entity Leasing Rules (New) 169

§ 11.3 Internal Revenue Code § 168(H) 169

Chapter 12: Healthcare Entities in Joint Ventures 171

§ 12.1 Overview 171

§ 12.2 Classifications of Joint Ventures 172

§ 12.3 Tax Analysis 173

§ 12.4 Other Healthcare Industry Issues 175

§ 12.5 Preserving the 50/50 Joint Venture 176

§ 12.9 Government Scrutiny 176

§ 12.11 The Patient Protection and Affordable Care Act of 2010:

§ 501(R) and Other Statutory Changes Impacting

Nonprofit Hospitals 177

§ 12.12 The Patient Protection and Affordable Care Act

of 2010: ACOs and Co-Ops:

New Joint Venture

Healthcare Entities (Revised) 180

Chapter 13: Low-Income

Housing, New Markets, Rehabilitation, and

Other Tax Credit Programs 181

§ 13.2 Nonprofit-Sponsored

LIHTC Project 181

§ 13.3 Low-Income

Housing Tax Credit (Revised) 182

§ 13.4 Historic Investment Tax Credit 186

§ 13.6 New Markets Tax Credits (Revised) 196

§ 13.10 The Energy Tax Credits 212

§ 13.11 The Opportunity Zone Funds: New Section 1400Z-1

and

Section 1400Z-2

(Revised) 213

Appendix 13B 275

Chapter 14: Joint Ventures with Universities 291

§ 14.1 Introduction 291

§ 14.3 Colleges and Universities IRS Compliance Initiative 297

§ 14.5 Faculty Participation in Research Joint Ventures 298

§ 14.6 Nonresearch Joint Venture Arrangements 301

§ 14.7 Modes of Participation by Universities in Joint Ventures

(Revised) 301

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Contents

▪ x ▪

Chapter 15: Business Leagues Engaged in Joint Ventures 313

§ 15.1 Overview 313

§ 15.2 The Five-Prong

Test (Revised) 314

§ 15.3 Unrelated Business Income Tax 315

Chapter 16: Conservation Organizations in Joint Ventures 317

§ 16.1 Overview 317

§ 16.2 Conservation and Environmental Protection as a Charitable

or Educational Purpose: Public and Private Benefit 317

§ 16.3 Conservation Gifts and § 170(H) Contributions (Revised) 318

§ 16.7 Emerging Issues 344

Chapter 17: International Joint Ventures 345

§ 17.5 General Grantmaking Rules 345

§ 17.11 Application of Foreign Tax Treaties 347

Chapter 19: Debt Restructuring and Asset Protection Issues 351

§ 19.1 Introduction 351

§ 19.2 Overview of Bankruptcy 351

§ 19.3 The Estate and the Automatic Stay 352

§ 19.4 Case Administration 353

§ 19.5 Chapter 11 Plan 354

§ 19.6 Discharge 355

§ 19.7 Special Issues: Consequences of Debt Reduction 355

Index 000