Use of Financed Property Can Jeopardize Exemption of Interest on Financing

Journal of Taxation of Exempt Organizations, Volume 5, Number 5

Marc Gerson discusses the use of municipal bond financing by Section 501(c)(3) organizations, such as hospitals, universities and museums. Gerson notes that if the property financed with municipal bonds is used in an unrelated trade or business, interest on the bonds will not be exempt from tax.

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