Description
A comprehensive review of the latest developments for tax-exempt organizations engaged in joint ventures
In the 2025 Cumulative Supplement to the fourth edition of Joint Ventures Involving Tax-Exempt Organizations, veteran tax attorney Michael I. Sanders delivers an essential update to the premier text on the subject of joint ventures with tax-exempt organizations. You’ll discover every relevant and recent development in the liability of, and consequences to, exempt organizations participating in joint ventures with for-profit and other tax-exempt entities.
This authoritative guide offers unmatched access to relevant IRC provisions, Treasury regulations, IRS rulings, relevant judicial rulings, and legislative developments that impact exempt organizations considering or involved in joint ventures. You’ll also find:
- Sample models, checklists, and numerous citations to Internal Revenue Code sections, Treasury Regulations, case law, and IRS rulings
- Suggestions for structuring joint ventures and minimizing the risk of audit or penalties
Written by a recognized expert in this complex and rapidly evolving field, the 2025 Cumulative Supplement is a must-read resource for tax attorneys, accountants, and professionals working with tax-exempt organizations.
Table of Contents
Preface xi
Acknowledgments xv
Chapter 1: Introduction: Joint Ventures Involving Exempt Organizations 1
§ 1.4 University Joint Ventures 1
§ 1.5 Low- Income Housing and New Markets Tax Credit Joint Ventures 1
§ 1.6 Conservation Joint Ventures 2
§ 1.8 Rev. Rul. 98- 15 and Joint Venture Structure 2
§ 1.10 Ancillary Joint Ventures: Rev. Rul. 2004- 51 2
§ 1.14 The Exempt Organization as a Lender or Ground Lessor 2
§ 1.15 Partnership Taxation 3
§ 1.17 Use of a Subsidiary as a Participant in a Joint Venture 3
§ 1.22 Limitation on Private Foundations’ Activities That Limit Excess Business Holdings 4
§ 1.24 Other Developments 4
Chapter 2: Taxation of Charitable Organizations 9
§ 2.1 Introduction (Revised) 9
§ 2.2 Categories of Exempt Organizations (Revised) 16
§ 2.3 § 501(C)(3) Organizations: Statutory Requirements 22
§ 2.4 Charitable Organizations: General Requirements (Revised) 28
§ 2.5 Categories of Charitable Organizations (Revised) 35
§ 2.6 Application for Exemption 40
§ 2.7 Governance (Revised) 51
§ 2.8 Form 990: Reporting and Disclosure Requirements 59
§ 2.9 Redesigned Form 990 63
§ 2.10 The IRS Audit 63
§ 2.11 Charitable Contributions 68
§ 2.12 State Laws (New) 78
Chapter 3: Taxation of Partnerships and Joint Ventures 81
§ 3.1 Scope of Chapter (Revised) 81
§ 3.3 Classification as a Partnership 84
§ 3.4 Alternatives to Partnerships 98
§ 3.7 Formation of Partnership 98
§ 3.8 Tax Basis in Partnership Interest 98
§ 3.9 Partnership Operations 99
§ 3.10 Partnership Distributions to Partners 100
§ 3.11 Sale or Other Disposition of Assets or Interests 100
§ 3.12 Other Tax Issues 101
Chapter 4: Overview: Joint Ventures Involving Exempt Organizations 107
§ 4.1 Introduction 107
§ 4.2 Exempt Organization as General Partner: A Historical Perspective (Revised) 108
§ 4.6 Revenue Ruling 2004- 51 and Ancillary Joint Ventures 116
§ 4.9 Conversions from Exempt to For- Profit and from For- Profit to Exempt Entities 116
§ 4.10 Analysis of a Virtual Joint Venture 116
Chapter 5: Private Benefit, Private Inurement, and Excess Benefit Transactions 119
§ 5.1 What Are Private Inurement and Private Benefit? 119
§ 5.2 Transactions in Which Private Benefit or Inurement May Occur 121
§ 5.3 Profit- Making Activities as Indicia of Nonexempt Purpose 123
§ 5.4 Intermediate Sanctions 123
§ 5.6 Planning (New) 133
§ 5.7 State Activity with Respect to Insider Transactions 134
Chapter 6: Engaging in a Joint Venture: The Choices 137
§ 6.1 Introduction 137
§ 6.2 LLCs (Revised) 138
§ 6.3 Use of a For- Profit Subsidiary as Participant in a Joint Venture (Revised) 139
§ 6.4 Supporting Organizations 158
§ 6.5 Private Foundations and Program- Related Investments 158
§ 6.6 Nonprofits and Bonds 163
§ 6.7 Exploring Alternative Structures 165
§ 6.8 Other Approaches (Revised) 169
Chapter 7: Exempt Organizations as Accommodating Parties in Tax Shelter Transactions 183
§ 7.2 Prevention of Abusive Tax Shelters 183
§ 7.3 Excise Taxes and Penalties 184
Chapter 8: The Unrelated Business Income Tax 185
§ 8.1 Introduction 185
§ 8.3 General Rule 186
§ 8.4 Statutory Exceptions to UBIT 187
§ 8.5 Modifications to UBIT 188
§ 8.7 Calculation of UBIT (Revised) 188
Chapter 9: Debt- Financed Income 205
§ 9.1 Introduction 205
§ 9.2 Debt- Financed Property 205
§ 9.3 The §514(C)(9) Exception 206
§ 9.6 The Final Regulations 207
Chapter 10: Limitation on Excess Business Holdings 209
§ 10.1 Introduction 209
§ 10.2 Excess Business Holdings: General Rules (Revised) 209
§ 10.3 Tax Imposed 225
§ 10.4 Exclusions 225
Chapter 11: Impact on Taxable Joint Ventures: Tax- Exempt Entity Leasing Rules 231
§ 11.3 Internal Revenue Code § 168(h) 231
§ 11.5 Restrictions on Tax- Exempt Use Property 231
Chapter 12: Health Care Entities in Joint Ventures 237
§ 12.1 Overview 237
§ 12.2 Classifications of Joint Ventures 239
§ 12.3 Tax Analysis 239
§ 12.4 Other Health Care Industry Issues 242
§ 12.5 Preserving the 50/50 Joint Venture 242
§ 12.9 Government Scrutiny 243
§ 12.11 The Patient Protection and Affordable Care Act of 2010: § 501(R) and Other Statutory Changes Impacting Nonprofit Hospitals 244
§ 12.12 The Patient Protection and Affordable Care Act of 2010: ACOs and Co- Ops: New Joint Venture Health Care Entities 247
Chapter 13: Low- Income Housing, New Markets, Rehabilitation, and Other Tax Credit Programs 249
§ 13.2 Nonprofit- Sponsored LIHTC Project 249
§ 13.3 Low- Income Housing Tax Credit (Revised) 250
§ 13.4 Historic Investment Tax Credit 255
§ 13.6 New Markets Tax Credits (Revised) 265
§ 13.10 The Energy Tax Credits 281
§ 13.11 The Opportunity Zone Funds: New Section 1400Z- 1 and Section 1400Z- 2 (Revised) 282
§ 13.12 The Inflation Reduction Act (Revised) 362
Appendix 13B 371
Chapter 14: Joint Ventures with Universities 387
§ 14.1 Introduction (Revised) 387
§ 14.3 Colleges and Universities IRS Compliance Initiative 398
§ 14.5 Faculty Participation in Research Joint Ventures 399
§ 14.6 Nonresearch Joint Venture Arrangements 401
§ 14.7 Modes of Participation by Universities in Joint Ventures (Revised) 402
Chapter 15: Business Leagues Engaged in Joint Ventures 417
§ 15.1 Overview 417
§ 15.2 The Five- Prong Test 418
§ 15.3 Unrelated Business Income Tax 419
Chapter 16: Conservation Organizations in Joint Ventures 421
§ 16.1 Overview 421
§ 16.2 Conservation and Environmental Protection as a Charitable or Educational Purpose: Public and Private Benefit 421
§ 16.3 Conservation Gifts and § 170(H) Contributions 422
§ 16.7 Emerging Issues 451
Chapter 17: International Joint Ventures 453
§ 17.1 Overview (Revised) 453
§ 17.3 Potential for Abuse: The Use of Charities as Accommodating Parties in International Terrorist Activities (New) 454
§ 17.5 General Grantmaking Rules 457
§ 17.11 Application of Foreign Tax Treaties 459
Chapter 19: Debt Restructuring and Asset Protection Issues 461
§ 19.1 Introduction 461
§ 19.2 Overview of Bankruptcy 461
§ 19.3 The Estate and the Automatic Stay 462
§ 19.4 Case Administration 463
§ 19.5 Chapter Plan 464
§ 19.6 Discharge 465
§ 19.7 Special Issues: Consequences of Debt Reduction 465
Index 467
