M-2 Rail

PART X, LINE 2:

“M-1 rail is a not-for-profit organization exempt from income taxes under section 501(c)(3) of the internal revenue code (irc) and is a publicly supported organization under irc section 509(a)(1). M-2 rail is a not-for-profit organization exempt from income taxes under section 501(c)(3) of irc and is classified as a type 2 supporting organization to m-1 rail under irc section 509(a)(3). Although m-1 rail and m-2 rail were granted income tax exemption by the internal revenue service, such exemption does not apply to "unrelated business taxable income." at september 30, 2019 and 2018, the organization has determined that no unrelated business income taxes are due for its activities. Accordingly, no provision for income taxes has been recorded in the accompanying consolidated financial statements. Management annually reviews its tax positions and has determined that there are no material uncertain tax positions that require recognition in the consolidated financial statements. The organization is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. Management believes it is no longer subject to income tax examinations for years prior to september 30, 2014. On december 22, 2017, the u.s. Government enacted comprehensive tax legislation commonly referred to as the tax cuts and jobs act (the "tax act"). The tax act makes broad and complex changes to the u.s. Tax code, including, but not limited to, (1) reducing the u.s. Federal corporate tax rate from 35 percent to 21 percent and changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after december 31, 2017. The act reduces the corporate tax rate to 21 percent, effective january 1, 2018. The impact to the organization for entity level taxes is not considered significant.”