Joint Venture/Subsidiary Analysis and Review

Joint ventures with commercial companies or commercial subsidiaries are no longer oddities in the operation of a nonprofit. Whether drawn to one of these structures by capital needs, to access important resources not otherwise affordable, or to penetrate an important market, nonprofits must face the tax rules that significantly impact the formation, capitalization, ongoing funding, sales, and lease transactions between it and the joint venture or subsidiary. These tax rules focus on control issues as well as income taxation issues to the nonprofit from particular arrangements with the joint venture or subsidiary.

Our professionals are well-versed in the peculiarities of joint venture or subsidiary formation, funding, and operations involving a nonprofit. We ensure that the nonprofit’s management group has a clear understanding of the tax impacts from the operations conducted by a joint venture or subsidiary. That leads to informed decisions on operations and transactions between the two and minimization of risks to the income tax liability and tax-exempt status of the nonprofit organization.