Church Alliance files Third Comment Letter Addressing UBTI Matters

Topic: 
Retirement/Tax

On June 23, 2020 the Church Alliance filed a comment letter in response to proposed regulations limiting the ability of tax-exempt organizations to pool separate limited partnership investments yielding UBTI.  Under the proposed regulations, combining of income and losses is only permitted if a partnership interest owned by tax-exempt entity is a “qualifying partnership interest” or “QPI”.  One part of the QPI test requires an ownership interest of 20% or less of the capital interest of the partnership.  Our letter explained that this threshold is too low and advocated for a higher threshold of 50%.  Because this low threshold may inhibit desirable investments for our members, our letter argues that this rule infringes on the exercise of religious freedom under the First Amendment.  Other related matters were also addressed.