East Akron Neighborhood Development Corporation

PART X, LINE 2:

“Eandc is exempt from federal income taxes under internal revenue code section 501(c)(3). Akron senior, canton, east, massillon i, massillon ii, north, south, southeast, stephenson, summit, west and eandc homes are structured as partnerships. Income taxes on partnership and llc income are levied on the partners and members in their individual capacity. Accordingly, all profits and losses of these entities are recognized by each partner and member on its respective tax return. Eandc contractors, llc, middlebury market, middlebury commons, spicer and veterans are single-member llc's which are wholly-owned by eandc. Subsidiary corporations are taxed as corporations and account for income taxes in accordance with the asset and liability method as required by fasb accounting standards codification topic 740, income taxes. Deferred tax assets and liabilities are recognized based on differences between the book and tax basis of assets and liabilities using currently enacted tax rates, if material. Eandc has determined the deferred tax asset is immaterial and is not reflected. The preparation of the tax return in accordance with accounting principles generally accepted in the united states of america requires the organization to report information regarding its exposure to various tax positions taken by the organization. The organization has determined whether any tax positions have met the recognition threshold and has measured its exposure to those tax positions. Management believes that the organization has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities. Federal and state tax authorities generally have the right to examine and audit the previous three years of tax returns filed. Any interest or penalties assessed to the organization are recorded in operating expenses. No interest or penalties from federal or state tax authorities were recorded.”