Explore BrainMass

Explore BrainMass

    Evaluate the IRS's Proposal in a Memo to the Research File

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Heal, Inc., a tax-exempt hospital, was sold to its shareholders for $6.6 million. The IRS determined that the fair market value of the hospital was $7.8 million. An IRS agent is proposing that the tax-exempt status of the hospital be revoked because the sale of the hospital to the shareholders for less than the fair market value resulted in "private inurement" to them. Evaluate the IRS's proposal in a memo to the research file.

    © BrainMass Inc. brainmass.com December 15, 2020, 5:43 pm ad1c9bdddf

    Solution Preview

    Subject: Private Inurement

    Private inurement as contained in section 300 of the Code prohibits the following:
    ? "the flow or transfer of income or assets of a tax-exempt organization (one that is subject to the doctrine) through or away from the organization, and
    ? the use of ...

    Solution Summary

    The solution evaluates the IRS's proposal in a memo to the research file.