Foundation for Eastern Christian School Association Inc.

Form 990, Part X, Line 2:

“The Foundation and Ditto are exempt from federal income taxes under Section 501 (c)(3) of the Internal Revenue Code. However, income from certain activities that are not directly related to the Foundation and Ditto's tax-exempt purpose are subject to taxation as unrelated business income. The Foundation and Ditto had no unrelated business income for the years ended August 31, 2022 and 2021. Eagle has elected to be taxed as a corporation for federal and state income taxes. Deferred taxes on Eagle are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, operating loss, and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Eagle has net operating loss carryforwards of approximately $1,240,000 and $1,117,000 for federal and state income tax purposes as of August 31, 2022, respectively, that expire at various times through 2035 and are subject to certain limitations and statutory expiration periods. Deferred income tax assets and liabilities for Eagle arise from temporary differences relating to operating losses and depreciation and amortization being reported for financial accounting and tax purposes in different periods. Long-term deferred tax assets are reported net of long-term deferred tax liabilities and are classified on the combined statements of financial position as other non-current assets (see Note 7 and 15). The Foundation and Ditto files income tax returns in the U.S. Federal jurisdiction, as well as in the New Jersey state jurisdiction.”