Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

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

p. 294. Insert the following at the end of this section:

The use of joint ventures by charities is 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 the 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 L. No. 115-97) has retained the low-income housing tax credit, and the new market tax credit was not repealed.

QUERY

With corporate tax rates being reduced to 21 percent, will there be less interest by C corps in investing in low-income housing tax credit or new market tax credits? However, the creation of the opportunity zone funds could attract substantial investment in qualified census tracts. ...