Rollins Brook Community Care

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“The filing organization is a subsidiary organization within AdventHealth. The consolidated financial statements of AdventHealth contain the following FIN 48 (ASC 740) footnote: Please note that dollar amounts are in thousands. Healthcare Corporation and its affiliated organizations, other than North American Health Services, Inc. and its subsidiary (NAHS), are exempt from state and federal income taxes. Accordingly, Healthcare Corporation and its tax-exempt affiliates are not subject to federal, state or local income taxes except for any net unrelated business taxable income. NAHS is a wholly owned, for-profit subsidiary of Healthcare Corporation. NAHS and its subsidiary are subject to federal and state income taxes. NAHS files a consolidated federal income tax return and, where appropriate, consolidated state income tax returns. All taxable income was fully offset by net operating loss carryforwards for federal income tax purposes; as such, there is no provision for current federal or state income tax for the years ended December 31, 2018 and 2017. NAHS also has temporary deductible differences of approximately $53,000 and $55,700 at December 31, 2018 and 2017, respectively, primarily as a result of net operating loss carryforwards. At December 31, 2018, NAHS had net operating loss carryforwards of approximately $54,500, expiring beginning in 2022 through 2026. Deferred taxes have been provided for these amounts, resulting in a net deferred tax asset of approximately $13,400 and $14,100 at December 31, 2018 and 2017, respectively. NAHS remeasured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. A full valuation allowance has been provided at December 31, 2018 and 2017 to offset the deferred tax asset, since Healthcare Corporation has determined that it is more likely than not that the benefit of the net operating loss carryforwards will not be realized in future years. The Income Taxes Topic of the ASC (ASC 740) prescribes the accounting for uncertainty in income tax positions recognized in financial statements. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no material uncertain tax positions as of December 31, 2018 and 2017. On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (Act), resulting in significant modifications to existing law. Certain provisions will impact tax-exempt organizations, including revisions to taxes on unrelated business activities, excise taxes on compensation of certain employees, and various other provisions. The regulations necessary to implement the law have not yet been promulgated, and the ultimate outcome of these regulations and the impact to the System cannot be determined presently. The System will continue to review and assess the impact of the legislation to the consolidated financial statements, but does not expect that the impact will be significant.”