Tax-Exempt Financing for Tax-Exempt Organizations: Is Your Nonprofit Eligible, and Do the Benefits Outweigh the Costs?

In this presentation:

- Eligible Organizations: Those qualified under Section 501(c)(3) of the Internal Revenue Code.

- More complicated than the typical bank loan.

- To qualify for tax exemption, the debt must be issued by a government entity, with the proceeds being re-loaned to the exempt organization.

- Typically, the issuer of the debt is a state or local government entity (the “Issuer”) where the exempt organization and its proposed project are located.

- Referred to as a “conduit borrowing,” with the government entity typically assuming no obligation on the debt.

- Rather, the government issuer serves as a mere conduit to pass the loan proceeds on to the true borrower, the 501(c)(3) conduit borrower, and remitting the debt service payments from that borrower to the lender(s).

Please see full presentation below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  501(c)(3), Borrowers, Conduit Borrowing, Exempt Organizations, Financing, Income Taxes, Safe Harbors, Tax Exemptions

Published In: Finance & Banking Updates, Nonprofits Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Venable LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »