Pension trusts exempt under Section 501(a) and employees' beneficiary association trusts exempt under Section 501(c)(9) are subject to a myriad of tax compliance requirements.
Startup Basics: Money People and TechnologyRoger Royse
The Royse Law firm offers significant advise that early stage startups should ensure they understand. The slides contain great considerations that startups should utilize. Our team is a full service firm that provides legal counseling to many startups. Please contact us so we can help you ensure the health of your startup. (01/2018)
Startup Basics: Money People and TechnologyRoger Royse
The Royse Law firm offers significant advise that early stage startups should ensure they understand. The slides contain great considerations that startups should utilize. Our team is a full service firm that provides legal counseling to many startups. Please contact us so we can help you ensure the health of your startup. (01/2018)
Filings Required To Close Out An Illinois Business Entitywww.growthlaw.com
This checklist describes the actions (like collecting all payments due and paying what you owe), tax returns, and entity filings appropriate to closing out various forms of Illinois business entities, with statutory references and links for forms downloads
The Form 990 continues to present challenges. Learn how to improve your compliance process in terms of information gathering, coordination and presentation.
EB-5
The United States Citizenship and Immigration Services (USCIS) administers the Immigrant Investor Program, also known as “EB-5.” The EB-5 visa category was created by the United States Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.
Through the Immigration Act of 1990 Investor VISA Program, Congress enacted the Immigration Act of 1990, which includes a program permitting foreign investors to obtain permanent residency in the United States.
The Impact of FATCA and CRS on Employee Share Plans and Share OwnershipAndrea Huck-Esposito
2015 heralds the start of US FATCA report submissions, requiring global reporting of financial accounts to the US. Following on from FATCA, the Organisation for Economic Co-operation and Development (OECD) are introducing agreements for a Common Reporting Standard (CRS). The CRS is designed to extend ‘FATCA-style’ reporting across other jurisdictions with an expectation that over 40 countries will adopt this. Join this informative discussion to better understand what FATCA and CRS means, learn about the related time frames and reporting obligations, and more importantly, find out what the impact of these regulations is to both employee share plans and share ownership. Come with questions, leave with answers on this tricky topic.
The slides provide a brief background on foreign loans and investments in the Philippines including foreign direct investments. It also shows some data on these financial inflows
Brian was invited to an event in Palo Alto hosted by the Asian Commercial Professional to discuss the procedures and tax implications on Foreigners investing in real property in the U.S.
These are the slides from my annual presentation to the Toronto computer Lawyers’ Group on “The year in review in Computer, Internet and E-Commerce Law”. It covered the period from June 2014 to June 2015. The developments included cases from Canada, the U.S. the U.K. and other Commonwealth countries.
Filings Required To Close Out An Illinois Business Entitywww.growthlaw.com
This checklist describes the actions (like collecting all payments due and paying what you owe), tax returns, and entity filings appropriate to closing out various forms of Illinois business entities, with statutory references and links for forms downloads
The Form 990 continues to present challenges. Learn how to improve your compliance process in terms of information gathering, coordination and presentation.
EB-5
The United States Citizenship and Immigration Services (USCIS) administers the Immigrant Investor Program, also known as “EB-5.” The EB-5 visa category was created by the United States Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.
Through the Immigration Act of 1990 Investor VISA Program, Congress enacted the Immigration Act of 1990, which includes a program permitting foreign investors to obtain permanent residency in the United States.
The Impact of FATCA and CRS on Employee Share Plans and Share OwnershipAndrea Huck-Esposito
2015 heralds the start of US FATCA report submissions, requiring global reporting of financial accounts to the US. Following on from FATCA, the Organisation for Economic Co-operation and Development (OECD) are introducing agreements for a Common Reporting Standard (CRS). The CRS is designed to extend ‘FATCA-style’ reporting across other jurisdictions with an expectation that over 40 countries will adopt this. Join this informative discussion to better understand what FATCA and CRS means, learn about the related time frames and reporting obligations, and more importantly, find out what the impact of these regulations is to both employee share plans and share ownership. Come with questions, leave with answers on this tricky topic.
The slides provide a brief background on foreign loans and investments in the Philippines including foreign direct investments. It also shows some data on these financial inflows
Brian was invited to an event in Palo Alto hosted by the Asian Commercial Professional to discuss the procedures and tax implications on Foreigners investing in real property in the U.S.
These are the slides from my annual presentation to the Toronto computer Lawyers’ Group on “The year in review in Computer, Internet and E-Commerce Law”. It covered the period from June 2014 to June 2015. The developments included cases from Canada, the U.S. the U.K. and other Commonwealth countries.
Comparison Between Canadian And Us Class Actions Law And Practicejyatesdahlgren
This is a slide deck comparing Canadian to US class action practice and procedure. It includes discussion of history, informing principles, certification, carriage motions, cost regimes, and other issues.
Canada’s competition and foreign investment laws are now enforced with more vigour than ever -- the Blakes Competition, Antitrust & Foreign Investment Group provides practical guidance on how to get regulatory approval for mergers, strategic alliances and joint ventures in this increasingly challenging enforcement environment.
When for-profit and not-for-profit worlds collideEY
Becoming an accountable care organization (ACO) requires serious consideration of the impact it can have on a company’s operations. See which issues overlap in the for-profit and not-for-profit sectors.
Insurance health plans and the ACA Section 9010 Annual FeeEY
Understand the federal income tax status of existing and new Section 501(c)(3) and Section 501(c)(4) HMOs, and the structure of the ACA Section 9010 fee on health insurance providers.
In this presentation India income-tax provisions on Indian LLP has been analysed. It also covers taxation on conversion of firm to LLP and company to LLP
International Taxation – US Citizen and Green Card Holder (Resident Alien)Smart Accountants
With the Tax Season shaking the entire industry, only something valuable should divert your attention. And believe us when we say that our webinar series, which covers a variety of highly engaging topics around U.S Taxation is exactly what you should be focusing on!
Conversion worksheetGreen shaded cells are from Chapter 5 financia.docxmaxinesmith73660
Conversion worksheetGreen shaded cells are from Chapter 5 financial StatementsEnter all amounts as positive numbers. The worksheet is formatted to add debits to assets & expenses and add credits to revenues, liabilities & equityRefr. Account TitlesDebitsCreditsGov'tal Fund Balances Adjustments & EliminationsGovern-mental Funds AdjustedInternal Service FundsBalances for Gov't-wide StmtsDebitsCreditsDebitsCreditsAtype debit accounts in this columnDEBITS:type credit accounts in this columnCash830,320830,320830,320Cash with Fiscal Agent928,000928,000928,000Investments259,000259,000259,000Taxes Receivable, net274,000274,000274,000Interest Receivable, net16,85016,85016,850Inventories--Due from State Govt.580,000580,000580,000Due from Other Funds--Capital Assets-- both rows--Expenditures (expenses) Current- General Govt.1,646,9001,646,9001,646,900 Public Safety3,026,9003,026,9003,026,900 Highway and Streets2,471,9002,471,9002,471,900 Sanitation591,400591,400591,400 Health724,100724,100724,100 Welfare374,300374,300374,300 Culture and Recreation917,300917,300917,300Compensated Absences Exp--Other Expenditures (expenses)-- - Debt Service Principal800,000800,000800,000 - Interest (expenditure/expense)514,000514,000514,000 both rows - Capital Outlay5,798,1005,798,1005,798,100 - Depreciation--Other Fin. Uses - Transfers Out1,876,7001,876,7001,876,700-Total Debits21,629,77021,629,770CREDITS:Accounts Payable493,400493,400493,400Due to Other Funds40,20040,20040,200Accrued Interest Payable--Bonds Payalbe both rows--Premium on Bonds--Compensated Absence Payable--Advance from Water Utility Fund--Deferred Inflows: Property Taxes27,50027,50027,500Accumulated Depreciation both rows--Revenues-Property Taxes6,657,5006,657,5006,657,500Sales Taxes2,942,0002,942,0002,942,000Interest21,22021,22021,220Licenses & Permits800,000800,000800,000Miscellaneous350,000350,000350,000State Grant for Highway Street Expenses1,072,0001,072,0001,072,000Capital Grant- Gen Gov't332,000332,000332,000Capital Grant- Public Safety1,320,0001,320,0001,320,000----Other Financing Sources--Proceeds of Bonds4,000,0004,000,0004,000,000Premium on Bonds200,000200,000200,000Transfers In1,876,7001,876,7001,876,700Net Position at beginning of year- three rows1,497,2501,497,2501,497,250Total Credits21,629,77021,629,770column totals: debits = credits ??------
CITY OF MONROE
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A presentation made by Craig Morris to the Long Island Not-for-Profit Conference at SUNY Old Westbury with the following goals:
To introduce the various tax threats and concerns Non-Profit Organizations face;
To provide you with resources to:
* research them further
* avoid them
* resolve them
Tax Guide to Overseas Real Estate Investments for U.S. InvestorsDurise
Before you even begin to consider a jump into the foreign real estate investment pool, it’s important to become as knowledgeable about the entire process as possible. One item that is particularly important to research and understand is the tax implications that go along with property investing overseas. To that end, we’ve put together this tax guide to help U.S. real estate investors gather some much needed tax information.
This session will focus on issues surrounding tax exempt bonds and techniques for completing Schedule K, refunding issues, considerations surrounding deemed reissuance and more.
The 440 page LexisNexis® Guide to FATCA Compliance was designed in consultation, via numerous interviews and meetings, with government officials, NGO staff, large financial institution compliance officers, investment fund compliance officers, and trust companies, from North and South America, Europe, South Africa, and Asia, and in consultation with contributors who are leading industry experts. The contributors hail from several countries and an offshore financial center and include attorneys, accountants, information technology engineers, and risk managers from large, medium and small firms and from large financial institutions. Thus, the challenges of the FATCA Compliance Officer are approached from several perspectives and contextual backgrounds. See http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327
This 28 chapter Guide contains three chapters written specifically to guide a financial institution's lead FATCA compliance officer in designing a plan of internal action within the enterprise and interaction with outside FATCA advisors with a view of best leveraging available resources and budget [see Chapters 2, 3, and 4]. Sample chapter available at http://www.lexisnexis.com/store/images/samples/9780769853734.pdf
2019 Greek Tech Finance Network Presentation on US Entity Structures: Legal, ...marathonvc
Our fast-growing startup community has oftentimes seen companies that start from Greece expand overseas to the point where most of their revenue originates from the United States.
Marathon hosted the Greek Tech Finance Network event with an agenda devoted to Greek startups entering the US, offering practical insights on US incorporation, tax and intellectual property matters.
The theme for this quarter is momentum meets uncertainty. The upward trend in crude oil, natural gas, LNG and refined product prices that began in Q1 continued into Q2. Crude oil markets began the quarter just below $100/bbl and have closed below that level on only two days since late April. As we begin Q3, there are increasing concerns about the health of the global economy and how that might affect oil and gas demand.
Quarterly analyst themes of oil and gas earnings, Q1 2022EY
Financial questions continued to attract the most attention of the analyst community, with major focus on how companies will respond to the war in Ukraine, elevated commodity prices and improved cash flows. Strategic questions focused on how the changing geopolitical environment will affect capital allocation in the short and long term. Operationally, all eyes were on the capacity of companies to step up asset utilization and bring new projects to market quickly. Explore the latest EY quarterly analysts themes.
EY Price Point: global oil and gas market outlook, Q2 | April 2022EY
The theme for this quarter is rearrangement. The loss, or potential loss, of Russian oil and gas supplies is forcing producers, refiners and traders to rethink the flow of crude oil and refined products from the wellhead to the gas pump in light of sanctions, potential sanctions and the risk of reputational damage. Countries, companies and consumers will all be searching for ways to adapt, and the outcome of the race to bring alternatives to market could alter the global energy landscape for years to come.
It is likely crude oil and LNG prices will remain elevated for some time. The process of diverting Russian oil through countries unwilling to sanction it will take time and there is little indication OPEC members are willing (or able) to increase production to make up for the loss of Russian crude. Spare capacity sat at 3.7 mbpd at the end of 2021, just above where it was in January 2020. Currently, sanctioned Venezuelan and Iranian production (about 3 mbpd below their peak) could fill the gap, but political and commercial obstacles remain. At today’s prices, US shale production is attractive, but the fastest the industry has been able to grow is between 1mbpd and 2mbpd per year. The LNG infrastructure was already stretched before the war in Ukraine and there is little prosect of finding new supplies soon.
As the largest buyer of Russian energy, Europe will be the epicenter. There is a deeply embedded bias there in favor for renewable energy, and the current crisis is certain to result in an all-out effort to accelerate the build-out of wind and solar power. The capacity to add new green energy is limited though by the project pipeline and supply chains for solar panels and wind turbines, and it is likely that much of the shortfall will be made up with the new LNG infrastructure.
EY Price Point: global oil and gas market outlookEY
As the last quarter of the second pandemic year draws to a close, we continue to see heightened contrast
between the medical and economic points of view. While COVID-19 cases are close to their all-time highs, so
are equity prices, and a leading investment bank declared (on 2 December, 2021 after the Omicron outbreak in South Africa) that it was “optimistic about the possibility of a vibrant 2022.” When news of the variant hit in
late November, the markets were rocked by the prospect of yet another round of local mobility restrictions and
an interrupted return to normal international travel patterns, on top of the Biden Administration’s announced
release of 50 million barrels of crude from the US Strategic Petroleum Reserve. So far though, with OPEC
standing by its planned gradual return to normal production, oil prices have stabilized, albeit below where they
were in mid-November. Henry Hub prices, always at the mercy of the weather, responded predictably to a
warmer-than-normal early winter in the US, falling from US$6.60/MMBtu in early October to below
US$4.00/MMBtu by mid-December. In Europe and Asia, following a short reprieve at the start of the quarter,
piped natural gas prices have spiked again on concerns triggered by Russian troop buildups on the Ukraine
border and uncertainties surrounding the Nordstream 2 pipeline. Looking forward, OPEC and the U.S. Energy
Information Administration (EIA) in their last forecasts of the year both projected that 2022 oil demand would
be above what we saw in 2019. Although time will tell if those forecasts are realized and other events could
intervene, the response to new virus outbreaks is well-practiced and the trade-off between public health and
economic reality has tipped toward a cautiously optimistic view.
EY Price Point: global oil and gas market outlook, Q2 April 2021EY
The theme for this quarter is governed. Apparent market balance at prices that could be sustainable is the product of calculated choices by market leaders and the cooperation of those who follow them. Economics played their customary role as well, with capital scarcity in North America taking about 2 million barrels per day out of the market, about half of the remaining gap in demand. While inventories are close to their pre-COVID-19 levels, there is still uncertainty. The resolution of the pandemic is in sight, but timing is unclear. Vaccine distribution in the US is having an impact but Europe is struggling to contain a third wave of infections. The taps have opened on economic stimulus, but it remains to be seen if policymakers have done enough or if they have overshot the mark.
The shape of the crude oil forward curve has fundamentally changed since the end of the last quarter. In late December of last year, the Brent forward curve was gradually increasing while today, the curve is backwardated. This is a clear sign that the market sees a short-term dynamic that is disconnected from the medium-to-long-term fundamentals. The lasting impact of the COVID-19 pandemic remains to be seen. While many have opined that COVID-19 marks a turning point in energy transition, the IEA recently released a five-year forecast of oil demand that shows steady growth, albeit at rates that are below historical expectations.
Gas markets are a paradox. At the Henry Hub and at LNG destinations, demand grows, investment lags and prices will occasionally attract attention. Traders, so far though, are unconvinced and futures prices don’t indicate imminent scarcity at any link in the value chain.
EY Price Point: global oil and gas market outlookEY
We enter 2021 on a note of cautious optimism for global health, the world economy, and the oil and gas markets. The first weeks of December brought approval in the US and the UK of the first of several COVID-19 vaccines. The speed with which vaccine development occurred is unprecedented, but certainly welcome. In the weeks following the early November announcement of 90+% effectiveness by the manufacturer of the first approved vaccine, the price of WTI crude oil increased by US$10/bbl to US$48/bbl, the highest level since early March. Sustainability hasn’t returned yet, and whatever time it takes to get the world to normal, it will take even longer for normalization within the oil and gas markets. Inventories remain at historically high levels and, optimistically, it will take until April before inventory returns to levels observed in the preceding five years. That’s an estimate, and there has obviously been some difficulty properly calibrating the expectations of how balance will return and how long it will take. In late November, OPEC met to adjust its output plans because of the anemic rebound in demand. In mid-December, the IEA lowered its demand forecast for 2021 due mostly to continued sluggishness in aviation fuel demand.
A mild winter has interrupted a recovery in North American natural gas prices after a run-up motivated by curtailed capital expenditures, upstream activity and production. After an initial meltdown, with cargo cancellations and dramatic price reversal, LNG markets have made a remarkable comeback, and the spread between Asia and Henry Hub has reached a level we haven’t seen in almost three years. It may be the case that interruption in FIDs has brought us to the cusp of a balance that can support reliable returns.
EY Price Point: global oil and gas market outlook (Q4, October 2020)EY
Oil and gas prices have recovered steadily from their lows and are relatively stable, but that stability is supported by the combination of purposeful withholding of production by oil-producing countries and economic stress on upstream independents. Oil prices closed the quarter roughly where they started it, while refining spreads were down slightly. LNG spreads were substantially higher at the end of Q3 than they were at the beginning of the quarter but are still roughly half of what is generally thought of as sustainable.
Going forward, the market will be looking closely at how the economy and demand respond to new developments with respect to a potential COVID-19 vaccine and the US election.
EY Price Point: global oil and gas market outlookEY
As we close the second quarter of 2020, in most of Europe and Asia, the first (and hopefully last) wave of the COVID-19 crisis appears to be abating. In the parts of the US where the virus hit early, the profile has largely matched Europe’s, while in other parts, the urge to reopen businesses has trumped the desire to contain the virus and uncertainty looms. In the developing world, the crisis has just begun, but without the economic headroom and resources necessary to contain it. As the crisis unfolded, the effect on oil and gas demand has been predictable but difficult to gauge precisely and therefore difficult to manage.
Oil prices have crept up steadily as production has been curtailed through coordinated action (OPEC+) and because of economic reality (unconventional oil in North America). That trend has been subject to momentary spasms when bad news hit the market. It would be understandable if traders were nervous, and it seems that they are. Although nowhere near where it was at the peak of the crisis, option implied volatility is still at historically high levels. Gas markets, without the benefit of coordination on the supply side, continue to deal with the market implications of storage at or near capacity. Interfuel competition in power generation has always provided something of a floor, but those lows have been, and will continue to be, tested.
Zahl der Gewinnwarnungen steigt auf RekordniveauEY
Immer mehr deutsche börsennotierte Unternehmen müssen ihre eigenen Umsatz- oder Gewinnprognosen nach unten korrigieren. Im ersten Quartal stieg die Zahl der Prognosekorrekturen auf ein neues Rekordniveau: Insgesamt 77 Gewinn- oder Umsatzwarnungen wurden registriert.
Die Corona-Krise trifft auch die Versicherungsbranche mit voller Wucht. Die Versicherer rechnen mit weniger Neugeschäft. Jeder Fünfte mit Personalabbau und Prämienerhöhungen.
Liquidity for advanced manufacturing and automotive sectors in the face of Co...EY
With a global economy in crisis due to Covid-19 our liquidity and cash management deck for advanced manufacturing and
mobility companies looks at how these companies should best respond.
IBOR transition: Opportunities and challenges for the asset management industryEY
EY Wealth & Asset Management explores the practical implications and the way forward for the transition to the new risk-free rates. This presentation aims to help asset managers and asset owners explore IBOR transition strategies that are compliant and future-focused.
Fusionen und Übernahmen dürften nach der Krise zunehmenEY
Folgt auf die Corona-Krise ein M&A-Boom? Laut Capital Confidence Barometer von #EY hoffen 40 Prozent der deutschen Unternehmen auf sinkende Bewertungen von Übernahmekandidaten.
EY Price Point: global oil and gas market outlook, Q2, April 2020EY
The first quarter of this year has seen some extraordinary events. As if chronic oversupply, prices stuck below sustainable levels, the looming energy transition, and investor pressure to decarbonize weren’t enough, our industry now faces a dramatic, but hopefully temporary, downturn in demand as a result of the ongoing COVID-19 outbreak.
Our Global Chemical Industry Leader Frank Jenner explores the trends and drivers that will shape the chemical industry of tomorrow in our latest Chemical Market Outlook.
Die Geschäftslage im Mittelstand hat sich leicht verschlechtert, ist in den meisten Branchen aber weiter überwiegend gut - die Einstellungsbereitschaft sinkt.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
This presentation poster infographic delves into the multifaceted impacts of globalization through the lens of Nike, a prominent global brand. It explores how globalization has reshaped Nike's supply chain, marketing strategies, and cultural influence worldwide, examining both the benefits and challenges associated with its global expansion.
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BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
1. 22nd Annual Health Sciences
Tax Conference
Tax considerations for pensions, VEBAs and
other institutional investors
December 3, 2012
2. Disclaimer
► Any US tax advice contained herein was not intended or written
to be used, and cannot be used, for the purpose of avoiding
penalties that may be imposed under the Internal Revenue
Code or applicable state or local tax law provisions.
Page 2 Tax considerations for pensions, VEBAs and other institutional investors
4. Presenters
► Brad Bond ► Bob Vuillemot
Treasurer Ernst & Young LLP
University Hospitals Pittsburgh, PA
Cleveland, OH + 1 412 644 5313
robert.vuillemot@ey.com
► Ben Pitchkites
Ernst & Young LLP ► Jennifer Richter
Indianapolis, IN Ernst & Young LLP
+ 1 317 681 7440 St. Louis, MO
benjamin.pitchkites@ey.com + 1 314 290 1024
jennifer.richter@ey.com
Page 4 Tax considerations for pensions, VEBAs and other institutional investors
5. Objectives
► Review federal and state tax issues impacting § 501(a)
pension trusts and § 501(c)(9) voluntary employees
beneficiary association (VEBA) trusts
► Identify international tax implications and compliance
requirements
► Identify planning ideas to reduce US and foreign taxes of
pension and VEBA trusts
Page 5 Tax considerations for pensions, VEBAs and other institutional investors
7. Background — Section 501(a) pension trusts
► US corporate-defined benefit pension plan assets total
approximately US$1 trillion
► Average allocation to alternative asset class is 14% and is
increasing
► Public pension plan average allocation is 20%
► Composition of alternative asset investments:
► Private equity 45%
► Hedge funds 18%
► Real estate 31%
► Real assets 6%
Source: Cliffwater LLC 2011 Survey, “Allocations to Alternative Investments.” Composition percentages reflect public pension fund allocations.
Page 7 Tax considerations for pensions, VEBAs and other institutional investors
8. Tax considerations for pension trusts
► Investment structuring
► Obtaining treaty benefits
► Reclaiming foreign withholding at source
► Domestic tax compliance
► Federal tax compliance
► State tax compliance
► Information returns — e.g., reportable transactions, foreign
activities
► Foreign tax compliance
► Accounting Standards Codification (ASC) 740
► Qualification issues
► Forms 5500
Page 8 Tax considerations for pensions, VEBAs and other institutional investors
9. Domestic taxation of pension trusts
► Pension trusts are exempt from federal income tax under
§ 401(a) and § 501(a).
► Pension trusts are not required to file Form 990, but are
required to file Form 990-T if they earn unrelated business
income (UBI) of more than US$1,000.
► Note that pension trusts are entities separate from their
sponsors.
► Standard trust tax rates under § 1(e) apply.
► Currently, 35 states and DC also tax unrelated business
taxable income (UBTI) of pension trusts.
Page 9 Tax considerations for pensions, VEBAs and other institutional investors
10. Unrelated business income tax (UBIT)
► Income from an “unrelated” trade or business
► Income from property that is leveraged, i.e., that the
taxpayer borrowed money to buy, or continued debt in
order to carry (debt-financed property)
► Limited exception for certain real property indebtedness
► "Income" subject to UBIT includes both income derived from, and
gain on the sale of, debt-financed assets that produce income
subject to UBIT
► Standard federal tax rates (35%, plus possible state tax)
Page 10 Tax considerations for pensions, VEBAs and other institutional investors
11. UBI information provided by partnerships
► Section 6031(d) of the Internal Revenue Code (IRC)
states:
“the information required … to be furnished to its partners
shall include such information as is necessary to enable
each partner to compute its distributive share of
partnership income or loss … in accordance with section
512(a)(1).”
Page 11 Tax considerations for pensions, VEBAs and other institutional investors
12. Compliance overview — Form 990-T
► Qualified plans (e.g.,
pension trusts) are not
required to file Form 990.
► Qualified plans file Form
990-T if they earn more
than US$1,000 of UBTI.
► Note earlier due date for trust
returns (April 15 for calendar
year trusts)
Page 12 Tax considerations for pensions, VEBAs and other institutional investors
13. Domestic compliance
Federal filing
requirements
State filing K-1s Foreign bank
requirements (and other info) account reports
Filing requirements resulting
from foreign transactions
Page 13 Tax considerations for pensions, VEBAs and other institutional investors
14. K-1 analysis — objectives
► Federal UBI
► State UBI
► Classification of UBI — passive/non-passive
► Foreign filing requirements
► Reportable transactions
Page 14 Tax considerations for pensions, VEBAs and other institutional investors
15. Unrelated business income concepts
► There are three typical ways that a fund organized as a
partnership may generate UBI:
► Operation of a trade or business
► Example: an oil and gas partnership
► Borrowing to make investments
► Example: a commodities fund that borrows to make large investments
in futures contracts
► Flow-through from other investments
► Example: a fund of funds that invests in other partnerships
► Depreciation recapture under Sections 1245 or 1250
Page 15 Tax considerations for pensions, VEBAs and other institutional investors
16. Unrelated debt — financed income
► 514(c)(9) exception
► Debt-financed income from real property is excluded from UBI for
“qualified organizations.”
► Qualified organizations
► Section 170(b)(1)(A)(ii) educational organizations and their Section
509(a)(3) supporting organizations
► Section 401 qualified trusts
► Section 501(c)(25) multiple parent real property holding organizations
Page 16 Tax considerations for pensions, VEBAs and other institutional investors
17. Identification of federal UBI
► Total UBI should be disclosed and marked with the
appropriate code:
► 05 Form K-1 — code “P”
► 06–11 Forms K-1 — code “V”
Page 17 Tax considerations for pensions, VEBAs and other institutional investors
18. Identification of federal UBI (cont.)
Page 18 Tax considerations for pensions, VEBAs and other institutional investors
19. Identification of federal UBI (cont.)
Page 19 Tax considerations for pensions, VEBAs and other institutional investors
20. Identification of federal UBI (cont.)
Page 20 Tax considerations for pensions, VEBAs and other institutional investors
21. Identification of federal UBI (cont.)
Page 21 Tax considerations for pensions, VEBAs and other institutional investors
22. IRC Section 469 — passive activity loss
limitation
► § 469 limits the deductions and credits taxpayers may
claim related to passive activities.
► General rule: net losses from a taxpayer’s passive
activities (passive activity losses or “PALs”) may not be
used to offset net income from the taxpayer’s non-passive
activities.
► PALs may be carried forward and used to offset passive income in
future years, and may be deducted fully when taxpayers dispose of
their interest in the passive activity.
Page 22 Tax considerations for pensions, VEBAs and other institutional investors
23. Classification of UBI — passive/non-passive
► Need to break UBI into three categories:
► Passive
► Portfolio
► Non-passive
Page 23 Tax considerations for pensions, VEBAs and other institutional investors
24. Classification of UBI — passive/non-passive
(cont.)
► Portfolio income/loss
► Not subject to passive activity loss rules
► Includes debt-financed income (not derived in the ordinary course
of a trade or business) from interest, ordinary dividends, annuities
or royalties, gain or loss on the sale of property that produces such
income or is held for investment, and related deductions
► Consists of specific Schedule K-1 line items
Page 24 Tax considerations for pensions, VEBAs and other institutional investors
25. Schedule K-1 instructions
► The Schedule K-1 instructions
identify the line items that are
considered portfolio income.
► The corresponding Box 13
deductions (e.g., investment
interest expense) are
considered to be “portfolio”
in nature.
Page 25 Tax considerations for pensions, VEBAs and other institutional investors
26. Portfolio income on the Schedule K-1
Page 26 Tax considerations for pensions, VEBAs and other institutional investors
27. Portfolio deductions on the Schedule K-1
Page 27 Tax considerations for pensions, VEBAs and other institutional investors
28. IRS Form 8582
► Passive activity loss limitations
► Determine allowable passive activity loss for the year and
suspended portion to carry forward
► Do not report losses from publicly traded partnerships
(PTPs)
Page 28 Tax considerations for pensions, VEBAs and other institutional investors
29. Publicly traded partnerships — § 469(k)
► What is a PTP?
► Any partnership if:
► Interests in the partnership are traded on an established
securities market
or
► Interests in such partnership are readily tradeable on a
secondary market (or substantial equivalent)
Page 29 Tax considerations for pensions, VEBAs and other institutional investors
30. Schedule K-1
Page 30 Tax considerations for pensions, VEBAs and other institutional investors
31. Publicly traded partnerships — general rules
► You can not offset loss of a PTP against anything other
than income of the same PTP.
► If there is an overall loss and less than the entire interest
in the PTP was disposed of, losses are allowed only to the
extent of the income, and the excess is carried forward
and can be applied against future income from the PTP.
► If there is a loss and the entire interest in the PTP was
disposed of, the losses are not limited by the passive loss
rules.
Page 31 Tax considerations for pensions, VEBAs and other institutional investors
32. Potential filings due to alternative
investments
► Form 5471
► Form 8865
► Form 926
► Form 8858
► Form 8621
► Reports of foreign bank and financial accounts (Form TD
F 90-22.1)
Page 32 Tax considerations for pensions, VEBAs and other institutional investors
33. Potential filings related to foreign
transactions
► Transfers to foreign partnerships and corporations
► Transfers to foreign partnerships are required to be reported on
Form 8865 — “Return of U.S. Persons With Respect to Certain
Foreign Partnerships.”
► Transfers to foreign corporations are required to be reported on
Form
926 — “Return by a U.S. Transferor of Property to a Foreign
Corporation.”
Page 33 Tax considerations for pensions, VEBAs and other institutional investors
34. Reportable transactions
► Five categories of reportable transactions
1. Listed transactions
2. Confidential transactions
3. Contractual protection transactions
4. Loss transactions
5. Transactions of interest
Page 34 Tax considerations for pensions, VEBAs and other institutional investors
35. Loss transactions
► Section 165 losses
► Reporting thresholds
► Corporations — US$10 million in any single tax year; US$20
million in any combination of tax years
► Trusts — US$2 million in any single tax year; US$4 million in any
combination of tax years
► Exception — Section 988 foreign currency losses — US$50,000
threshold for any single tax year
Page 35 Tax considerations for pensions, VEBAs and other institutional investors
36. States that tax UBI from pension trusts
State UBI State UBI State UBI
Alabama Taxable Kentucky Not taxable North Dakota Taxable
Alaska Taxable Louisiana Taxable Ohio Not taxable
Arizona Taxable Maine Taxable Oklahoma Taxable
Arkansas Not taxable Maryland Taxable Oregon Taxable
California Taxable Massachusetts Not taxable Pennsylvania Not taxable
Colorado Taxable Michigan Taxable Rhode Island Taxable
Connecticut Taxable Minnesota Not taxable South Carolina Taxable
DC Taxable Mississippi Taxable South Dakota Not taxable
Delaware Not taxable Missouri Taxable Tennessee Taxable
Florida Taxable Montana Taxable Texas Not taxable
Georgia Taxable Nebraska Taxable Utah Taxable
Hawaii Taxable Nevada Not taxable Vermont Taxable
Idaho Taxable New Hampshire Not taxable Virginia Taxable
Illinois Taxable New Jersey Not taxable Washington Not taxable
Indiana Taxable New Mexico Not taxable West Virginia Not taxable
Iowa Taxable New York Taxable Wisconsin Taxable
Kansas Taxable North Carolina Taxable Wyoming Not taxable
Page 36 Tax considerations for pensions, VEBAs and other institutional investors
37. Structuring considerations
► Alternative investments may generate UBTI
► UBTI can be “blocked” by interposing an entity treated as a
corporation for US tax purposes.
► A blocker doesn’t eliminate the economic cost of UBTI; it just
means that the pension trust won’t have to do the compliance
itself.
► In some cases, a blocker can make matters worse.
► Dividends on US stocks earned directly by a tax-exempt entity, or
through a partnership, are exempt from UBIT (unless debt-financed
property).
► Dividends on US stocks earned by foreign corporations are subject to
US withholding tax (quite possibly, 30%) and there is no way for the
US owner to get it back.
Page 37 Tax considerations for pensions, VEBAs and other institutional investors
38. Hedge funds
US US tax- Foreign
taxable exempt investors
investors investors
US
Delaware LP Cayman Corp.
(foreign feeder)
Master Fund
Cayman LP
Page 38 Tax considerations for pensions, VEBAs and other institutional investors
39. Foreign tax issues
► Foreign countries can impose tax on dividends, interest,
profits from a local business and, in some cases, gains on
sale of local investments.
► A US pension trust might be exempt from some of these
taxes.
► And even if it is exempt, it might need to get a local ruling.
► Some US tax treaties give special benefits for US pension
trusts, if they are properly and timely claimed.
► Investing through a blocker might affect availability of US
tax treaty benefits.
Page 39 Tax considerations for pensions, VEBAs and other institutional investors
41. Background
► Funding of welfare benefits by employers through a trust
► Welfare benefits include: medical, dental, supplemental
unemployment benefits, sick and accident benefits, disability
benefits, life insurance and severance pay
► Irrevocable welfare benefit trust places assets beyond the
reach of employer’s creditors
► Distinction between welfare benefit “plan” and “trust”
► Welfare benefit plan
► A “plan” is a program of benefits promised to employees —
embodied in written plan document
► Form 5500 filed for “plan” (if 100 or more participants)
Page 41 Tax considerations for pensions, VEBAs and other institutional investors
42. Background (cont.)
► Trust
► A “trust” is the employer’s vehicle for funding its obligation under a
plan
or plans.
► It is established by a written trust instrument naming the employer
as settlor of the trust, appointing a trustee, and describing powers
and duties of the trustee.
► The employer may fund some, or all, benefits under its plan
through one or more trusts. Therefore, activity of the trust reflected
on the Form 990 may not reflect financial statements of the plan
(as shown on Form 5500).
Page 42 Tax considerations for pensions, VEBAs and other institutional investors
43. Typical funding via VEBA Trust
Employer
$
VEBA Trust
$
1. Employee
2. Care provider
3. Insurance company
Page 43 Tax considerations for pensions, VEBAs and other institutional investors
44. Employer deduction using VEBA Trust
► Prior to enactment of §§ 419 and 419A, acceleration of
the deduction was generally allowed when the
contribution was paid or accrued to the trust, irrespective
of when the actual benefits were paid to employees.
► The ability to control timing of the deduction is a prime advantage
associated with a trust.
► If a trust qualified for exemption of VEBA, then investment
earnings were tax-free prior to 1986.
► Since 1986, deductibility of employer contributions to a trust fund
is governed by §§ 419 and 419A.
Page 44 Tax considerations for pensions, VEBAs and other institutional investors
45. Employer deduction limitation
► § 419(b) provides that the Qualified direct cost = cash-basis cost of
current benefits paid
amount of any employer by the fund
deduction under § 419
Plus: addition to Addition to reserves
shall not exceed the fund’s qualified asset funded for:
account =
“qualified cost” for the 1) disability
2) medical
taxable year. 3) supplemental
unemployment
► Formula for qualified cost: benefits or
severance pay
4) life insurance
benefits [up to
account limit]
Minus: after-tax income = fund income less UBI
or other tax
Equals qualified cost = maximum deduction
Page 45 Tax considerations for pensions, VEBAs and other institutional investors
46. Voluntary employees beneficiary
associations — exemption requirements
► A VEBA is exempt from taxation under § 501(c)(9) if:
► The organization is an employees association
► Membership is voluntary
► The organization provides for the payment of life, sick, accident or
other benefits to its members or their dependents
► No part of the net earnings inures to the benefit of any private
shareholder or individual. Treas. Reg. § 1.501(c)(9)-1
Page 46 Tax considerations for pensions, VEBAs and other institutional investors
47. Section 501 (c)(9) VEBA exemption
requirements
► Same employer (or affiliated employer)
► Same collective bargaining agreement or labor union
► Same line of business in “same geographic locale”
► Participants must be “employees”
► At least 90% of participants must be employees (or their
spouses or dependents).
► Generally, employee status is based on employment tax status
or collective bargaining.
► Partners and sole proprietors are not employees for purposes of
the 90% test.
Page 47 Tax considerations for pensions, VEBAs and other institutional investors
48. Section 501 (c)(9) VEBA exemption
requirements — voluntary and association
► Voluntary
► Generally, an employee must affirmatively elect
► Considered voluntary even if membership is required as a result of
collective bargaining or where there is no detriment to employees
(e.g., reduction in pay for contributions)
► Association
► Legal entity — almost always a trust (can be a corporation or an
unincorporated association)
Page 48 Tax considerations for pensions, VEBAs and other institutional investors
49. Section 501 (c)(9) VEBA exemption
requirements — control
► A VEBA must be controlled by:
► Its membership, i.e., members elect or appoint administrators or
trustees of VEBA
► Independent trustee(s) (i.e., bank)
► If the VEBA is exclusively a welfare benefit plan under the Employee
Retirement Income Security Act of 1974 (ERISA), this requirement is
automatically considered satisfied (very rarely is a VEBA not an
ERISA plan).
► Trustees or fiduciaries, at least some of whom are designated by
the membership
► Most employee welfare benefit plans meet the control
requirement by coming under § 3(1) of ERISA.
Page 49 Tax considerations for pensions, VEBAs and other institutional investors
50. Section 501 (c)(9) VEBA exemption
requirements — permissible benefits
► Life benefits — consist of current protection only and
generally do not permit “permanent” life insurance (PLR
9903032)
► Sickness and accident
► Similar (other) benefits
► These are benefits designed to safeguard or improve the health of
an employee (or dependents), or protect against contingency that
interrupts or impairs earnings power
Page 50 Tax considerations for pensions, VEBAs and other institutional investors
51. Section 501 (c)(9) VEBA exemption
requirements — other benefits
► Examples of “other benefits” (PLR 9801011) are:
► Holiday and vacation pay
► Recreational activities (athletic leagues)
► Child-care
► Temporary living expenses
► Supplemental unemployment compensation benefits —
involuntary separation due to reduction in force, plant or operation
shut-down, or similar event — § 501(c)(17)
► Severance
► Education/training
Page 51 Tax considerations for pensions, VEBAs and other institutional investors
52. Section 501 (c)(9) VEBA exemption
requirements — non-qualifying benefits
► Examples of non-qualifying benefits are:
► Commuting expenses
► Homeowner’s insurance
► Savings facilities
► Malpractice insurance
► Non-distress loans
► Pension/annuity
► Deferred compensation payable over time (vs unanticipated event)
Page 52 Tax considerations for pensions, VEBAs and other institutional investors
53. Section 501 (c)(9) VEBA exemption
requirements — prohibited inurement
► Facts and circumstances
► Unreasonable compensation to trustees or employees
► Non-arm’s-length transactions with entities related to trustees or fiduciaries
► Prohibited inurement to employer
► “Excess assets” upon fund termination cannot revert to employer
► Loan to employer treated as prohibited inurement where loan was excessively large
and improperly secured (GCM 39884)
► Transfer of assets from one VEBA to another does not affect the tax-exempt status
of either VEBA and is not an employer reversion (PLR 9709006)
► Use of excess plan assets following plan termination to provide other qualified
benefits does not constitute prohibited inurement so long as the benefits do not
disproportionately benefit highly compensated employees (PLR 9740024)
► Form 1024 is used for application for exemption and generally must be filed
within 15 months after establishment of the VEBA
Page 53 Tax considerations for pensions, VEBAs and other institutional investors
54. Overview of UBIT rules for VEBAs
► Unrelated business taxable income is taxed at corporate
or trust rates (usually trust).
► UBTI is the lesser of:
► Excess set-aside
or
► Gross income (excluding exempt-function income) less applicable
deductions
► Basically = “taxable” net investment income (interest, dividends,
rents, royalties)
► Exempt-function income includes all fees paid by members of a VEBA
Page 54 Tax considerations for pensions, VEBAs and other institutional investors
55. Overview of UBIT rules for VEBAs — excess
set-aside
► Definition: Net assets in VEBA at year-end in excess of
the qualified asset account (QAA) limit under § 419A.
► An account receivable on the books of the VEBA does not
constitute “assets set aside” for purposes of increasing
the VEBA account limit.
► QAA limit does not include reserves for post-retirement
medical benefits (See Parker-Hannifin Corp. v.
Commissioner of Internal Revenue, 139F.3d 1090).
Page 55 Tax considerations for pensions, VEBAs and other institutional investors
56. Qualified asset account limit
► For qualified benefits, the amount reasonably and
actuarially necessary to fund:
► Claims incurred but unpaid
► Reported to claims-paying agent
► Incurred but not reported (IBNR)
► No reserve allowed for amounts set aside to pay insurance premiums
► No addition to QAA for claims incurred but unpaid if benefits provided
through insurance
► Administrative costs associated with claims
► Additional “reserve” for post-retirement medical and life insurance
benefits (however, medical reserve excluded for purposes of
excess set aside (see Code §512(a)(3)(E)(i) in UBIT calculation))
► Special additional account limit for severance and supplemental
unemployment benefits
Page 56 Tax considerations for pensions, VEBAs and other institutional investors
57. Calculation of qualified asset account
► Two acceptable methods for calculation:
► Actuarial certification (Code § 419(A)(c)(1))
► Safe harbors (Code § 419(A)(c)(5))
► Short-term disability — 17.5% of qualified direct costs (excluding
insurance premiums) for immediately preceding tax year of fund
► Medical — 35% of qualified direct costs (excluding insurance
premiums) for immediately preceding tax year of fund
► Long-term disability and life insurance — to be prescribed by
regulations
► Safe harbor only valid if amount determined is “reasonable and
actuarially necessary” to fund the benefits
► Safe harbor subject to IRS challenge
Page 57 Tax considerations for pensions, VEBAs and other institutional investors
58. Calculation of qualified asset account (cont.)
► Example (all dollars in US):
► Acme VEBA incurred qualified direct costs for medical benefits in 2011
of US$100,000.
► The safe harbor addition to the QAA is $35,000 (35% of $100,000).
► However, at December 31, 2012, the actuaries have calculated the
IBNR and unpaid claims reserves to be $25,000.
► Allowable additions to QAA will therefore be $25,000.
► If the taxpayer estimated QAA to be $40,000, without actuarial
certification, then only $35,000, the safe harbor, would be allowed.
Page 58 Tax considerations for pensions, VEBAs and other institutional investors
59. Unrelated business income formula
UBI = the lesser of:
(x-y) – (z-w) “excess assets”
Or
(p-q) – r “income”
Where x = the assets of the fund
y = assets not taken into account (facilities; assets
with useful life > one year)
z = account limit
w = post-retirement medical reserves described in
419A(c)(2) (grandfathered amounts excluded)
p = income of fund
q = employer and employee contributions
r = income from grandfathered post-retirement
reserves
Page 59 Tax considerations for pensions, VEBAs and other institutional investors
60. Overview of UBIT rules for VEBAs
► Exceptions to set aside limits under § 512(a)(3)(E):
generally, no UBIT for excess set-asides for the following:
► Employee pay — all VEBAs
► Plan must have at least 50 employees
► Nonrefundable contributions
► Collectively bargained plans — must cover 90%
► VEBAs sponsored by tax-exempt employers are
exempt from
§ 512(a)(3)(E)(iii). VEBA must have received funds
from an employer which was tax-exempt for a five-year
period.
Page 60 Tax considerations for pensions, VEBAs and other institutional investors
61. Recent UBIT case law developments
► The interpretation of VEBA UBIT rules is split among
federal courts where actual expenditures during the year
exceed the amount set aside in excess of the account
limit.
► Example (all dollars in US):
► VEBA has year-end assets of $1,000
► Year-end account limit = $750; excess set aside of $250
► VEBA earned $200 in investment income and spent $300 in actual
direct costs
► Taxpayers argued that $200 received in investment income was part
of $300 spent in direct costs, therefore, no UBI since all investment
income “spent” on direct costs
Page 61 Tax considerations for pensions, VEBAs and other institutional investors
62. Recent UBIT case law developments (cont.)
► Sherwin-Williams Co. v. Commissioner of Revenue: 330
F.3d 449 (2003)
► The Tax Court rejected the above interpretation but the Sixth
Circuit Court of Appeals (“Sixth Circuit”) held that VEBA trust
investment income may be set aside and used separately before
tax year-end to pay reasonable costs of administering health care
benefits, thereby avoiding
§ 512(a)(3)(E) exempt-function income limits.
► AOD 2005-002: The IRS won’t acquiesce to the Sixth Circuit
holding; will only follow in Sixth Circuit. The IRS position is that
amounts spent during the year cannot be specifically sourced, for
UBTI purposes, to the VEBA’s investment earnings for the year.
Page 62 Tax considerations for pensions, VEBAs and other institutional investors
63. Recent UBIT case law developments (cont.)
► CNG Transmission Management VEBA v. United States,
84 Fed.
Cl. 327; EBC 2790 (2008)
► The US Claims Court agreed with the IRS’ interpretation, and
rejected the Sixth Circuit, concluding that the taxpayer’s view was
contrary to temp. regs., which it found reasonable and entitled to
deference.
► Northrop Corp. Employee Insurance Benefit Plans Master Trust v.
United States, No. 08-23 T (Ct. Fed. Cl., June 28, 2011) —
followed CNG and held that a VEBA could not avoid limitation on
exempt function income under Code Sec. 512(a)(3)(E)(i) merely by
allocating investment income toward payment of welfare benefits
during the course of the year.
Page 63 Tax considerations for pensions, VEBAs and other institutional investors
64. Miscellaneous issues
► VEBAs use trust tax rate schedule and follow other trust
rules to calculate income on the 990-T
► Form 1041 Schedule D used to calculate rates for capital
gains and qualified dividends
► Trust limitation on net capital losses of $3,000 applies
► Passive activity loss rules apply
► Excise tax under 4976(b)(3) could apply to the return of
funds to the employer; tax = 100% of amounts returned
► Aggregation rule — § 419(h)(1)(B): permits aggregation of
two or more funds at election of employer; possible to
minimize UBI by combining multiple VEBAs of same
employer
Page 64 Tax considerations for pensions, VEBAs and other institutional investors