Joint Ventures Involving Tax-Exempt Organizations, 4th Edition

CHAPTER 9Debt-Financed Income

1. § 9.1 Introduction
2. § 9.2 Debt-Financed Property
3. § 9.6 The Final Regulations

§ 9.1 INTRODUCTION

p. 669. The last citation in footnote 3, second sentence, should read as follows:

Reg. § 1.514(c)-2.

§ 9.2 DEBT-FINANCED PROPERTY

(a) Overview

p. 671. Add the following to the end of footnote 10:

See TAM 201741019 (Oct. 13, 2017) (a tax-exempt trust's activities incurred UBIT from income generated by debt-financed property held through interests in a partnership when the property's activities were not substantially related to the trust's exempt purpose); PLR 20173005 (Jan. 20, 2017) and PLR 201702002 (Jan. 13, 2017) (a tax-exempt hospital may lease its premises to a state university as part of reorganization without incurring UBIT when the proceeds are used to expand and modernize the premises, an activity in furtherance of charitable purposes. Thus, the underlying property is not unrelated debt-financed property).

(c) Acquisition Indebtedness

pp. 676–677. Add the following to the end of footnote 29:

PLR 201418061 (Feb. 6, 2014) (borrowing of stocks by the funds—structured as partnerships, in which charity is invested—and entering into short positions held to not result in acquisition indebtedness incurred by organization, so that none of the distributive shares of funds' income or gain derived from these trading activities is treated as debt-financed property); PLR 201434024 (Aug. 22, 2014) (purchase of long positions in stocks in accounts at ...