Identify and understand the underlying tax principles involved with joint ventures and for-profit subsidiaries.
In a post-COVID time of inflation and economic uncertainty of economic upheaval, nonprofits everywhere are struggling for new sources of funding and expense sharing as need for their services grows exponentially. Simultaneously, the nonprofit sector has seen an influx of social enterprises - businesses designed not just to make a profit, but to further social goals. Given these two trends, more and more nonprofits find themselves considering for-profit activities such as joint ventures in order to address their funding needs and the growing needs of the constituencies they serve. This topic will cover the basic tax issues for organizations contemplating entering for-profit/nonprofit joint ventures, including IRS pronouncements and court cases to date It will also address and some drafting tips and practical issues that may arise in forming a joint venture. This presentation will help attorneys, nonprofit administrative personnel, and nonprofit financial advisors understand the parameters that govern joint ventures as they consider entering into new revenue arrangements.
Learning Objectives
- You will be able to explain what an organization entering into a joint venture must do to protect its tax-exempt status.
- You will be able to describe the basic requirements of a nonprofit/for-profit joint venture.
- You will be able to discuss UBTI issues that arise in the context of joint ventures.
- You will be able to identify practical issues that arise in drafting joint venture agreements.
Agenda
Exemption Issues
- Organizational and Operational Tests
- Private Inurement and Private Benefit
- Scope of Allowable For-Profit Activities for Exempt Organizations
UBTI Issues
- General Background
- UBTI Taxation of Partnerships
- C Corps, S Corps and Dividend as UBTI
Revenue Ruling 98-15: The Good, the Bad, and the Ugly
- Background: Whole Hospital Joint Ventures
- The Good Example
- The Bad Example
- The Ugly: What Happens When You Are Neither Good nor Bad
Post Revenue Ruling 98-15 Guidance
- Redlands
- David’s
- Ancillary Joint Ventures
- Updates Since St. David’s
Practical Tips and Drafting Hints
- Purpose Statements in Joint Ventures
- Board Control
- Management Agreements
- Debt Structures, Liabilities, and Other Traps
Speakers
Elaine Waterhouse Wilson,
West Virginia University College of Law- Professor of Law and prior Associate Dean for Academic Affairs, West Virginia University College of Law
- Teaches federal income taxation, taxation of business entities, estate and gift taxation and estate planning, nonprofit organizations, contracts, and other areas of transactional law
- Previously a partner in private practice in the Tax-Exempt Organizations Group of the Chicago office of Quarles & Brady LLP, 2007 to 2011; an associate and then partner in the Estate Planning Group of the Indianapolis office of Barnes & Thornburg LLP, 1996 to 2007; and an associate in the Individual Client Practice of Sullivan & Cromwell in New York City, 1993 to 1996
- Prior Chair, Charitable Group of the American Bar Association’s Section on Real Property, Trusts, and Estates; Past Chair of the ABA Charitable Organizations Group
- WVU College of Law’s 2014 Professor of the Year; 2015 WVU Foundation Professor of the Year
- Listed in The Best Lawyers in America, 2007 to present, nonprofit/charities law
- Named as one of the 40 Illinois Attorneys Under 40 To Watch, Law Bulletin Publishing Company, Chicago Lawyer magazine and The Chicago Daily Law Bulletin, 2009
- Received the 2006 Pro Bono Publico Award, Indiana Bar Foundation
- J.D. degree, magna cum laude, Boston University School of Law; B.A. degree, magna cum laude, Boston University College of Liberal Arts
Who Should Attend
This live webinar is designed for executive directors, accountants, attorneys, directors, officers, controllers, CFOs, and tax managers.
