Affordable Housing Partners Inc.

“Officers have a business relationship in which they participate in other real estate activities with one another.”

“Knollwood, crystal glen, autumn woods, and autumn woods ii are managed by pedcor management corporation, a professional property management company. Pedcor management corporation has a project owner's and management agent's certification for multifamily housing projects with the u.s. Department of housing and urban development. Under this certification, hud has approved pedcor management corporation to manage the projects. The management contract encompasses the day to day operations of the project including, but not limited to, collection of rents, maintenance of facilities, supervision of staff, and ongoing support for both the owners and tenants as needed in order to establish a safe, sanitary and affordable environment. One member of the board of directors, bruce cordingley, and one officer, phillip stoffregen, received reportable compensation from pedcor management corporation during the current year. The amounts of reportable compensation are as follows: phillip stoffregen: $309,786 bruce cordingley: $210,123”

“The auditing firm sends a draft of the return to the management company. The management company forwards a copy of the return to each board member for their comments prior to filing.”

“Compensation is subject to board approval.”

“The form 990 and all related financial and policy information are made available to the public upon request.”

“The management company receives a copy of the audit. Prior to the finalization of the audit, a copy of the audit is given to all of the board members for their comments. When the audit is up for bid, the board discusses the relationship with the current auditors and makes a determination as to whether to maintain this relationship or change to a new auditing firm.”

“An ordinary and necessary business expense deductible under irc sec 162. Pic and pac treat the payments made by taxpayer as insurance premiums. Since pic's and pac's gross premiums do not exceed $2,200,000, each elected under irc sec 831(b) to exclude premium income from taxable income and only be taxed on its net investment income. Pic and pac were incorporated in the state of vermont and are pure captive insurance companies. Under the fronting arrangement, pic and pac assume 50% of $1,000,000 per occurrence and in the annual aggregate. Defense and allocated loss adjustment expenses are included within these limits. This form 8886 is required to be filed under irs notice 2016-66 as modified by notice 2017-8. Section 3.05(b) of notice 2016-66 requires the following additional information to be disclosed in regard to this transaction of interest: sec. 3.05(b): when and how the taxpayer became aware of the transaction the owners of pic and pac had a general working knowledge of insurance and captive insurance companies since the 2000s, when each captive was formed. Based on this knowledge, the owners determined a captive insurance structure was prudent from a business and risk management perspective. By pic and pac providing insurance coverage, taxpayer is able to achieve the following: - smoothing the fluctuations in cost consistent with the insurance cycle - allowing more direct control on claims management and losses - assuring consistency in coverage and eliminating potential gaps in coverage the owners of pic and pac were not approached by any outside promoter or service provider advising them to enter into a captive arrangement.”