CHAPTER 4Overview: Joint Ventures Involving Exempt Organizations

  1. § 4.1 Introduction
  2. § 4.2 Exempt Organization as General Partner: A Historical Perspective
  3. § 4.6 Revenue Ruling 2004-51 and Ancillary Joint Ventures
  4. § 4.9 Conversions from Exempt to For-Profit and from For-Profit to Exempt Entities
  5. § 4.10 Analysis of a Virtual Joint Venture

§ 4.1 INTRODUCTION

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The use of joint ventures by charities are becoming critical in view of the recent tax legislation:

  • Reduction in tax rates, especially C corp rates to 21 percent (permanent). C corps have been the largest investor in low-income housing tax credits and new market tax credits.
  • Increase in standard deduction and reduction in individual rates.
  • Significant estate tax relief through doubling of exemption.
  • Estimated $1.45 trillion cost for 10-year period of tax reform.
  • Limit on or elimination of certain itemized deductions.
  • All of which will affect charitable giving and therefore make joint ventures even more attractive as a fundraising device.

However, the 2017 Tax Act (Pub. L. No. 115-97) has retained the low-income housing tax credit, and the new market tax credit was not repealed.

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