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CSTC Academy: Wednesday Webinar Series - Nonprofit Joint Ventures: Partnering with For-Profit Organizations
Wednesday, October 20, 2021, 10:00 AM - 11:40 AM PST
Category: Wednesday Webinar Series

Nonprofit Joint Ventures: Partnering with For-Profit Organizations
Wednesday, October 20, 2021
10:00 AM to 11:40 AM

Cost: Member: $40 / Non-Member: $70

Speaker: Louis Michelson, Esq
2 Federal Law hours
IRS: 18QC1-T-01516-21-O
CTEC: 1000-CE-4914

Session Description:
This topic includes critical issues for nonprofit joint ventures: identifying potential loss of exempt status, unrelated business income tax, partnership tax reporting and other tax reporting, for-profit subsidiaries and planning for maintaining separate corporate identity. This topic explains the tax principles involved with joint ventures and for-profit subsidiaries and joint venture policies.

Knowledge Level: Advanced

Learning Objectives:

#1: One primary area that nonprofits should consider before entering into a joint venture are income tax issues. Preliminarily, one needs to understand what the IRS considers to be a joint-venture. Next, one should appreciate that there are tax risks associated with a nonprofit’s participation in joint ventures. One risk includes possible loss of tax-exemption. There are a number of tests to evaluate whether exemption is being place at risk. One also needs to consider whether activities will trigger unrelated business income tax.

#2: One subject area critical to nonprofit joint ventures is partnership taxation. Allied with this mode of taxation are specialized rules of partnership tax reporting. Management of nonprofits needs to understand how income from a joint venture is passed through to the members of the joint venture. This presentation will also discuss the usefulness of for-profit subsidiaries, agency relationships and maintaining a separate corporate identity.

#3: This presentation will explain the reporting of joint ventures on Schedule R of Form 990. It introduces the definition of control in different contexts: including brother-sister related organizations and where there is indirect control. Part VI of Form 990 requires certain disclosures of a written policy or procedure that an organization uses in evaluating its participation in joint venture arrangements. This presentation reviews elements that should be included in a joint venture policy and planning considerations.

Louis Michelson, Esq

Louis E. Michelson focuses his practice on income tax planning, charitable giving and other federal, state and local taxation issues for individuals, corporations and tax-exempt organizations. Mr. Michelson advises public charities, private foundations, religious and educational organizations, and other nonprofit organizations on issues of formation, management, joint ventures, planned giving and board governance. He also has extensive experience with income tax planning for business transactions and estate planning.Mr. Michelson is AV® Peer Review Rated by Martindale-Hubbell effective December, 2003.

Mr. Michelson received his B.A. Degree, with general honors from the University of Chicago, his M.S. in Accountancy from DePaul University and his J.D. degree from UCLA School of Law. He has been admitted to practice with the U.S. Tax Court and the United States District Court, Central District of California.

Mr. Michelson is Immediate Past Chair of the Nonprofit Organizations Committee of the Business Law Section of the California Lawyers Association. He has served as Chair of the Tax-Exempt Organizations Committee of the Taxation Section of the State Bar of California, as Co-Chair of the Nonprofit Organizations Committee of the Business Law Section of the State Bar of California and as Chair of the Taxation Section of the Los Angeles County Bar Association. In May 2001 he participated in the Los Angeles County/California State Bar delegation to the Internal Revenue Service, Treasury and staff of the Congressional tax committees in Washington D.C. to discuss proposed guidance, as set forth in a co-authored paper, “Getting Connected: Business and Politics of Charities on the Internet.” Together with other attorneys, he assisted in reviewing and suggesting revisions to portions of the California Attorney General’s Guide to Charities. Mr. Michelson is a lecturer at UCLA Extension on tax issues for nonprofit organizations. He is also Adjunct Professor at David Nazarian College of Business and Economics California State University Northridge for a class on income taxation of trusts and estates. He has lectured for business and professional organizations and written articles on various federal and California tax topics. He is a member of the American Bar Association, California Lawyers Association, and Los Angeles County Bar Association