Fin 48 consolidating
* Unrelated Business Activity: Substantial unrelated business activities compared to the organization's tax-exempt activities.While the continued qualification and substantiation of an organization's tax-exempt status and assessment of potential UBI are the primary tax positions asserted by a nonprofit, other positions of significance to be considered include: * If international activities are conducted, either directly or through a partnership or joint venture, have the appropriate international filings occurred, including Form 5471 for ownership of a foreign entry and Form 926 for contributions of capital to a foreign entity?; * If activities are conducted in multiple states, either directly or through a partnership or joint venture, is the organization qualified as tax-exempt in those states, or if unrelated business income has been generated, is the organization filing the applicable tax returns?Imagine if your nonprofit could not reach a more likely than not conclusion on its tax-exempt status and had to disclose that to the public?
Under some accounting and tax rules, that just might happen.
Under ASC 740, an organization must evaluate each of its income-producing activities to determine whether a tax examination would determine that it is more likely than not sustainable that the transactions associated with the activity are tax-exempt.
Fin 48 consolidating comments