Ins and Outs of Alternative Investments

Author: Jennifer Becker Harris, Celia Davis, Clark Nuber

Whether your organization is new, expanding, or maintaining the status quo, it can be challenging for tax-exempt organizations to determine whether alternative investments are a good fit for their portfolio. While alternative investments may yield a high rate of return, they also bring about increased administrative complexity and a likely increase in your accounting fees and tax filings. Organizations need to be equipped to make informed decisions when considering adding or keeping alternative investments within their portfolio.

This session will explain the important tax nuances of alternative investments and how to evaluate whether they are a good fit for your organization. The session will primarily focus on tax and reporting implications when dealing with alternative investments.

Publication Date: August 2022

Designed For
CPAs, CFOs, auditors, enrolled agents, staff accountants, board members, tax attorneys, and others who work with tax-exempt organizations.

Topics Covered

• The different types of alternative investments including basic terminology and structure of investment funds
• Tax Implications of Alternative Investments
  • Unrelated Business Taxable Income
  • State Filings
  • Foreign Disclosures and Filings
• Considerations for Private Foundations
• Schedule K-1 Review
• Other Matters

Learning Objectives

• Identify basic considerations for investing in alternatives
• Recognize the foreign and state reporting requirements for alternative investments
• Identify unrelated business income tax traps in alternative investments
• Describe characteristics of an alternative investment
• Identify the first step in considering the tax implications of an alternative investment
• Recognize which net operating losses (NOLs) have a carryover limit
• Identify which form is required to be filed when certain property valued at more than $1 is transferred to a foreign partnership within a 12-month period

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of investments.

Advance Preparation
None