Better Business Bureau Education Foundation

PART X, LINE 2:

“The bureau is exempt from federal income taxes under section 501(c)(6) of the internal revenue code, except on net income derived from unrelated business activities. The income the bureau receives from auto manufacturers for the arbitration of complaints made by members of the general public against the auto manufacturers is subject to tax on unrelated business income. The autoline program had net losses of $36,758 and $17,802 for the years ended december 31, 2013 and 2012, respectively. The bureau is also subject to income taxes on the certain advertising income from its membership directory. The net taxable advertising loss was $46,026 and $12,256 for the years ended december 31, 2013 and 2012, respectively. As of december 31, 2013, the bureau has a federal net operating loss carryforward of $170,111 which will begin to expire in 2028. As of december 31, 2013, the bureau has a nebraska net operating loss carryforward of $138,194 which will begin to expire in 2031. As of december 31, 2013, the bureau has an iowa net operating loss carryforward of $6,758 which will begin to expire in 2032. As of december 31, 2013, the bureau has a kansas net operating loss carryforward of $1,126 which will begin to expire in 2023. The bureau believes that it has appropriate support for any tax positions taken, and as such, does not have any uncertain tax positions that are material to the financial statements. The bureau's federal returns of organization exempt from business income tax (form 990 and 990t) for december 31, 2013, 2012 and 2011 are subject to examination by the irs, generally for three years after they were filed.”