Stay up to date on all relevant regulatory and legislative changes, as well as leading case law, in a complicated area of law In the 2021 Cumulative Supplement to the 4th edition of Joint Ventures Involving Tax-Exempt Organizations, a renowned team of authors delivers the latest updates and developments in the legislation, regulations, and case law governing joint ventures with tax-exempt organizations. Practical and relevant commentary accompanies authoritative reviews of the most recent changes in this complex area of law, creating an essential and comprehensive resource for executives, managers, and other leaders engaged in joint ventures with tax-exempt organizations, as well as the professionals who advise them.
Table of Contents
Preface xi
Acknowledgments xiii
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 3
1.24 Other Developments (Revised) 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 (Revised) 19
2.4 Charitable Organizations: General Requirements 22
2.6 Application for Exemption (Revised) 23
2.7 Governance 31
2.8 Form 990: Reporting and Disclosure Requirements (Revised) 32
2.10 The IRS Audit (Revised) 34
2.11 Charitable Contributions (Revised) 38
Chapter 3: Taxation of Partnerships and Joint Ventures 47
3.1 Scope of Chapter 47
3.3 Classification as a Partnership 50
3.4 Alternatives to Partnerships 50
3.7 Formation of Partnership 50
3.8 Tax Basis in Partnership Interest 50
3.9 Partnership Operations 51
3.10 Partnership Distributions to Partners (New) 52
3.11 Sale or Other Disposition of Assets or Interests 52
3.12 Other Tax Issues 53
Chapter 4: Overview: Joint Ventures Involving Exempt Organizations 59
4.1 Introduction 59
4.2 Exempt Organization as General Partner: A Historical Perspective 60
4.6 Revenue Ruling 2004-51 and Ancillary Joint Ventures 62
4.9 Conversions from Exempt to For-Profit and from For-Profit to Exempt Entities 62
4.10 Analysis of a Virtual Joint Venture 62
Chapter 5: Private Benefit, Private Inurement, and Excess Benefit Transactions 65
5.1 What Are Private Inurement and Private Benefit? 65
5.2 Transactions in Which Private Benefit or Inurement May Occur 67
5.3 Profit-Making Activities as Indicia of Nonexempt Purpose 69
5.4 Intermediate Sanctions (Revised) 69
5.7 State Activity with Respect to Insider Transactions 78
Chapter 6: Engaging in a Joint Venture: The Choices 81
6.1 Introduction 81
6.2 LLCs 82
6.3 Use of a For-Profit Subsidiary as Participant in a Joint Venture (Revised) 83
6.5 Private Foundations and Program-Related Investments 94
6.6 Nonprofits and Bonds 98
6.7 Exploring Alternative Structures 101
6.8 Other Approaches (Revised) 102
Chapter 7: Exempt Organizations as Accommodating Parties in Tax Shelter Transactions 111
7.2 Prevention of Abusive Tax Shelters 111
7.3 Excise Taxes and Penalties 112
Chapter 8: The Unrelated Business Income Tax 113
8.1 Introduction 113
8.3 General Rule 114
8.4 Statutory Exceptions to UBIT 115
8.5 Modifications to UBIT 116
8.7 Calculation of UBIT (Revised) 116
Chapter 9: Debt-Financed Income 133
9.1 Introduction 133
9.2 Debt-Financed Property 133
9.6 The Final Regulations 134
Chapter 10: Limitation on Excess Business Holdings 137
10.1 Introduction 137
10.2 Excess Business Holdings: General Rules 137
10.3 Tax Imposed 139
10.4 Exclusions (Revised) 139
Chapter 12: Healthcare Entities in Joint Ventures 145
12.1 Overview 145
12.2 Classifications of Joint Ventures 146
12.3 Tax Analysis 147
12.4 Other Healthcare Industry Issues 149
12.5 Preserving the 50/50 Joint Venture 150
12.9 Government Scrutiny 150
12.11 The Patient Protection and Affordable Care Act of 2010: 501(R)and Other Statutory Changes Impacting Nonprofit Hospitals 151
12.12 The Patient Protection and Affordable Care Act of 2010: ACOs and Co-Ops: New Joint Venture Healthcare Entities 154
Chapter 13: Low-Income Housing, New Markets, Rehabilitation, and Other Tax Credit Programs 155
13.2 Nonprofit-Sponsored LIHTC Project 155
13.3 Low-Income Housing Tax Credit (Revised) 156
13.4 Historic Investment Tax Credit 159
13.6 New Markets Tax Credits (Revised) 169
13.10 The Energy Tax Credits 185
13.11 The Opportunity Zone Funds: New Section 1400Z-1 and Section 1400Z-2 (Revised) 186
Appendix 13B 242
Chapter 14: Joint Ventures with Universities 259
14.1 Introduction (Revised) 259
14.3 Colleges and Universities IRS Compliance Initiative 265
14.5 Faculty Participation in Research Joint Ventures 266
14.6 Nonresearch Joint Venture Arrangements 269
14.7 Modes of Participation by Universities in Joint Ventures 269
Chapter 15: Business Leagues Engaged in Joint Ventures 275
15.1 Overview 275
15.2 The Five-Prong Test 276
15.3 Unrelated Business Income Tax 276
Chapter 16: Conservation Organizations in Joint Ventures 277
16.1 Overview 277
16.2 Conservation and Environmental Protection as a Charitable or Educational Purpose: Public and Private Benefit 277
16.3 Conservation Gifts and 170(h) Contributions (Revised) 278
16.7 Emerging Issues 302
Chapter 17: International Joint Ventures 303
17.5 General Grantmaking Rules (Revised) 303
17.11 Application of Foreign Tax Treaties 305
Chapter 19: Debt Restructuring and Asset Protection Issues 307
19.1 Introduction 307
19.2 Overview of Bankruptcy 307
19.3 The Estate and the Automatic Stay 308
19.4 Case Administration 309
19.5 Chapter 11 Plan 310
19.6 Discharge 311
19.7 Special Issues: Consequences of Debt Reduction 311
Index 313
