Notable IRS Regulations on UBTI

In addition to finalizing the rule of using NAIC codes for making the determination as to whether an organization has more than one separate unrelated business activity for Form 990-T reporting purposes, which you can read all about here, the IRS Final Regulations (which adds section 512(a)(6) to the Internal Revenue Code) also includes other …

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Gifts-in-kind: What you need to know

A lot of not-for-profit organizations receive gifts-in-kind but there has not always been a lot of guidance on presenting gifts-in-kind in the financial statements and footnotes. Good news, the FASB has issued ASU 2020-07 – Not-for-Profit Entities (Topic 958) which addresses these issues. Don’t miss: Are you missing a related party footnote disclosure? This standard …

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Are you missing a related party footnote disclosure?

Related party footnote disclosure is easy to overlook but is quite significant in proper financial reporting and a requirement of GAAP if applicable. A related party footnote is needed to disclose certain common control relationships and corresponding transactions recorded in the financials that are related to one party having the leverage to influence the policies …

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New rules for taxable income

Tax exempt organizations may not be 100% tax exempt. Organizations may get involved in certain income-producing activities that could be subject to tax (unrelated business taxable income or UBTI). Under the Tax Cuts and Jobs Act, the IRS began requiring tax exempt organizations to report the income and expenses from each unrelated business activity separately …

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Accounting for donation restrictions

In 2016, FASB issued Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities – Presentation of Financial Statements of Not-for-Profit Entities, which became effective for fiscal years beginning after December 15, 2017. Among other items, this update addressed the complexity and understandability of net asset classification, reducing the number of categories from three down to two. The …

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What’s in the 2020 Compliance Supplement Addendum for you?

Every year the Office of Management and Budget (OMB) releases one Compliance Supplement which is typically used by auditors to perform single audits. But for 2020, there were two. On Dec. 22, 2020, the OMB released the Addendum to the 2020 Compliance Supplement, which is effective for audits of fiscal years ending June 30, 2020, …

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Does a Shuttered Venue Operators Grant = a Single Audit?

Many arts and cultural nonprofit organizations will be applying for the Shuttered Venue Operators Grant (SVOG) in early April. The SVOG was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. Organizations can apply to the SBA to receive a grant up to 45% of their gross earned revenue up to …

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Contributions or exchange transactions?

In June 2018 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-08, Not-for-Profit Entities-Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made. The ASU clarifies and improves guidance for contributions received and contributions made by clarifying whether to account for transactions as contributions or exchange transactions. The ASU …

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Shuttered venue operators grant program update

Back in January we wrote a blog about the COVID relief grant that will be made available for arts and cultural organizations called the Shuttered Venue Operators Grant (SVOG) program.  Since this blog was written, the SBA has issued some updates to this program including a date for when arts and cultural organizations can start …

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How do you determine which grant to test in a single audit?

When single audits are required, there are a few steps needed in order to determine which federal program will be tested. Auditors use a risk-based approach when looking at the programs and their backgrounds. Don’t miss: Are not for profits prohibited from lobbying? The steps are as follows: Identify the larger federal programs and label …

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