samingeorgia Posted August 12, 2018 Report Share Posted August 12, 2018 Here are the facts: an exempt organization bought a piece of property a few years ago and leased it to the general public for purposes not related to their exempt purpose. Since they borrowed the money used to acquire the property, it is treated as "debt-financed" property for UBTI purposes. As time passed, they paid off the acquisition indebtedness. This past fiscal year, the organization sold the property for a pretty good gain. As I read the law and regs, if there was a zero balance on the acquisition indebtedness for 12 months prior to the sale, the property is no longer "debt-financed" and the gain can be completely excluded. If there was a small balance at the first of the 12 month period, I would use the proportion of "average acquisition indebtedness" to the average basis and report this proportion of gain on the 990-T. Am I reading this right? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.