Tax-exempt entities, notional principal contracts, and the unrelated business income tax

Article Abstract:

Receipts from notional principal contracts (NPCs) entered into by tax-exempt organizations for investment or liability-management purposes should not be treated as unrelated business taxable income (UBTI). NPCs include swaps such as interest rate swaps and equity index swaps, receipts from which may be considered 'passive income' excluded from UBTI; in addition, they do not represent unfair competition, the reason for taxing unrelated business income. Proposed Treasury regulations issued in 1991 would exclude income from interest rate swaps from UBTI; the exclusion should be extended to all NPCs.

Taxation, Unrelated business income tax, Swaps (Finance)

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Developments in the law - nonprofit corporations

Article Abstract:

Organizations may select nonprofit corporation status for public or private purposes. Judges have often been given too much discretion in classifying nonprofits. Internal Revenue Code 501(c)(3) or 501(c)(4) could be used as a standard for determining when a nonprofit corporation serves a public function. Fiduciary duties, qualifications for tax exemption, charitable fundraising limitations, political activity of nonprofits and tort law are discussed.

Nonprofit organizations

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Civil procedure - class actions - Third Circuit holds that the filing of a class action tolls the statute of limitations for a subsequent class action when the initial denial of class certification is unrelated to the appropriateness of the underlying claims for class treatment

Article Abstract:

In the case of McKowan Lowe & Co. v. Jasmine, Ltd., the US Court of Appeals for the 3rd Circuit held that the statute of limitations does not run for a subsequent class action ?claim during the time when a request for class certification for an initial claim is decided if the initial request was denied for reasons other than inappropriateness of the claim.

Class actions (Civil procedure), Class action lawsuits, Case Note, Civil procedure, Limitation of actions, Statute of limitations

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