Tax Tips for Higher Education

Many schools have “guest house” or visitor housing operations. These activities can result in unrelated business income – or not. Last week, we looked at a school that ran a “hotel operation”. This week let’s examine something that is not as formal.

Your college may not run a “hotel” on campus, but many schools have “guest house” operations. These activities can result in unrelated business income – or not. For the next two weeks, we’ll take a look at both ends of this spectrum.

Here is a question we’ve received several times this year – Are donated services/labor tax deductible on the “donors” tax return per IRS rules?

Troas Bible College (TBC) is a private university. Their CFO went to a conference and heard horror stories about excise taxes TBC might owe beginning in 2018 on any “Cadillac” health plans they have in place at that time. They call in a panic, asking, “How do we know if our plans are “Cadillacs”? How much taxes might we owe? How will we report and pay the taxes? What do we need to be doing now?”

Our clients and friends at Denali Christian College (go Bighorns!) are a 501(c)(3) public charity. They have just received a letter from the IRS stating that they have been selected for an IRS examination regarding their 2013 Form 990. The Information Document Request (IDR) is detailed.