Tax Tips for Higher Education
Rentals of Real Property: Rendering of Services
ISSUE: Rentals of real property are generally excluded from unrelated business income. But what does it mean to have a “dual-use” rental? SITUATION: Saltwater Christian College (SCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually. SCC is planning to lease one floor of a four-story office building they own to an architecture firm. They call us to ask whether the lease income would constitute unrelated business income…
Snacks, Anyone?
ISSUE: With all the suspended deductions and taxability of fringe benefits going on in the wake of the “Tax Cuts and Jobs Act,” what about free snacks and Cokes that you provide for employees and guests? SITUATION: Idaho Bible College and Seminary (IBCS) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(i) [as a church]. They are not required to file Form 990 annually. IBCS has a “hospitality room” in the Administration Building where unlimited snacks (chips, nuts, cookies, etc.) and canned drinks are available to employees and visitors.
Tax Cuts and Jobs Act (Circa February 2019)
ISSUE: There are four main parts of the “Tax Cuts and Jobs Act” that could – possibly – affect your school. Have you been keeping track of those provisions? SITUATION: Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually. MBC’s accounting team emailed us prior to their board meeting to ask for an update on any provisions in the “Tax Cuts and Jobs Act” that they should be informing their leadership about…
2018 Form 990: Changes to the Form
For those institutions who are required to file Form 990, have you checked out this year’s changes to the Form?
SITUATION: Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually. The CFO at DCC calls us to ask about any changes to Form 990 for their tax year ending June 30, 2019. She says she knows about the “GAAP vs. Form 990” issues from listening to our webcasts over the past few months, but wonders if there any changes to the actual form?
Statement of Functional Expenses Times Two
ISSUE: Has your institution considered the TWO “Statements of Functional Expenses” required for this year’s financial statements and Form 990? SITUATION: Saltwater Christian College (SCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii). They are required to file Form 990 annually.
SCC’s CFO calls us to ask about the changes to be wrought by the requirement to follow ASU 2016-14 – for their fiscal year ended June 30, 2019 – with respect to functional expense presentations and disclosures. “Can we just follow the same methodology we’ve been using on Form 990 and write up a narrative about how we made those allocations?”