IRS Letter: Leasing to Partnership Won't Make Garage Debt Taxable

Duff, Susanna
April 2003
Bond Buyer;4/1/2003, Vol. 344 Issue 31605, p5
Trade Publication
The U.S. Internal Revenue Service (IRS) has issued a ruling that reinforces its position of looking at what makes up a partnership rather than the partnership itself when considering the private business use of a facility financed with tax-exempt debt. In a private-letter ruling released publicly on March 31, 2003, IRS determined a limited partnership and a general partnership created by two 501(c)(3) corporations to manage and operate their hospitals could lease one of the hospital's parking garages without making the bonds that financed it taxable. The ruling supports several previous IRS decisions that looked at partnerships created by joint operating agreements.


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