Recent IRS Regulations Involving Mixed-Use Projects Financed With Tax-Exempt Bonds Very Beneﬁcial to 501(c)(3) Health Care OrganizationsDownload
On Oct. 27, 2015, the United States Treasury Department and the Internal Revenue Service published long-awaited final regulations that provide welcome guidance to 501(c)(3) health care organizations that are borrowers of qualified 501(c)(3) bonds. The final regulations provide guidance on the allocation of tax-exempt bond proceeds and equity to specific uses within a mixed-use health care project. Additionally, the final regulations adopt rules to accommodate partnerships between 501(c)(3) health care organizations and private entities. The final regulations also clarify the rules for ‘‘anticipatory remedial actions’’ that permit bonds to be redeemed prior to an action that would cause the private activity restrictions applicable to all exempt bonds to be violated. Generally, all of these provisions of the final regulations will be of significant benefit to 501(c)(3) health care organizations that are borrowers of tax-exempt qualified 501(c)(3) bonds.
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