Lutheran Home Foundation Inc.

“The internal revenue service has indicated in a determination letter that the foundation is generally exempt from paying federal and state income tax because of its tax status as a nonprofit organization under section 501(c)(3) of the internal revenue code. The foundation files a form 990 (return of ogranization exempt from income tax) annually. When this return is filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merit of the position taken or the amount of the position that would ultimately be sustained. Examples of tax positions common to a foundation include the continued tax-exempt status of the organization and various positions relative to potential sources of unrelated business taxable income (ubit). Ubit is reported on form 990t, as appropriate. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes that it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions are not offset or aggregated with other positions. Tax positions that meet the "more likely than not" recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely to be realized on settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Form 990 filed by the foundation is subject to examination by the internal revenue service (irs) up to three years from the extended due date of each return. Form 990 filed by the foundation is no longer subject to examination for the years 2010 and prior.”

“$2,789,281 temporarily restricted net assets on the audited financials recorded as revenue on 990.”

“A ($49,112) fundraising expense reported in expense on audited financials and an offset against revenue on form 990, part viii, line 8(b). Also $6,523 of investment fees netted against investment income on audited financials and recorded as expense on 990.”

“A $49,112 fundraising expense reported in expense on audited financials and an offset against revenue on form 990, part vii, line 8(b).”

“$6,523 of investment fees netted against investment income on audited financials and recorded as expense on from 990.”