Tax Tips for Higher Education
Could Your Institution Benefit from Fuel Credits?
Issue There is a potential credit for fuel (e.g. gasoline and/or diesel) used by your institution “exclusively for use by a nonprofit educational organization.” Situation Marathon Bible College (MBC) is a public charity and a school under I.R.C. sections 501(c)(3) and...
UBIT: The Minimum Required Level of Knowledge
As we celebrate our 100th post, how about a UBIT Refresher?
Situation
Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). They are required to file Form 990 annually. Their new CFO call us and says, “I’m new to higher education – with a background in banking – and this UBI stuff seems daunting. How can I find out more about it – and fast?”
Do We Have “Donor Advised Funds?”
Donor Advised Funds require special reporting on Form 990 and special care in navigating the related rules.
Form 990-T: Charitable Contributions deduction
Marathon Bible College (MBC) is a public charity and a school under I.R.C. sections 501(c)(3) and 170(b)(1)(A)(ii). This year, for the first time, MBC has unrelated business income that ultimately shows a profit. This requires another first: their filing of Form 990-T. The CFO calls us to ask about the charitable contributions deduction on Form 990-T, Part II, Line 20. She asks, “Can we deduct all the expenses for the college for the year on that line?” We tell her first, “Great job in catching that opportunity – many schools miss it.” And, second, sadly, “No.”
Because MBC is organized as a corporation, the deduction is limited to 10% of their unrelated business net income before the charitable contributions deduction (and other, less common, limitations) AND it has to be made up of “grants/contributions” to other charities.
Is Coach’s Apparel – Provided by School – Taxable?
Denali Christian College (DCC) is a public charity and a school under I.R.C. sections 501(c)(3) and 170(b)(1)(A)(ii). The Denali Kodiaks are athletic teams that represent DCC in several sports including basketball, volleyball, baseball, softball, tennis, and cross country.
Every coach (head coach and assistant coach) has an employment agreement with DCC. The coaches all receive athletic clothing from DCC (in school colors and with the DCC and/or Kodiak logo). Generally, these items of apparel are worn at games, practices, and other venues representing the College.
DCC’s CFO calls us to ask whether the value of this clothing is taxable to the coaches. Keep reading to find out more …