The Nhp Foundation

PART X, LINE 2:

“Nhpf and its nonprofit affiliated entities have applied for and received determination letters from the internal revenue service ("irs") to be treated as tax-exempt entities pursuant to section 501(c)(3) of the internal revenue code and did not have any unrelated business income for the years ended december 31, 2023 and 2022. Due to their tax-exempt status, nhpf and its nonprofit affiliated entities are not subject to income taxes. Nhpf and its nonprofit affiliated entities are required to file and do file tax returns with the irs and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for income taxes and nhpf and its nonprofit affiliated entities have no other tax positions which must be considered for disclosure. Tax returns filed by nhpf and its nonprofit affiliated entities are subject to examination by the irs for a period of three years. While no tax returns are currently being examined by the irs, tax years since 2020 remain open. Single member limited liability companies are treated as disregarded entities for income tax purposes and, as such, are not subject to income taxes. Rather, all items of taxable income and deductions are passed through to and are reported by nhpf or its nonprofit affiliated entities on their income tax returns. Accordingly, these consolidated financial statements do not reflect a provision or benefit for income taxes for these entities. Since the entities are not required to file income tax returns, they have no filings which are open to examination by the irs. All other affiliated entities have elected to be treated as pass-through entities for income tax purposes and, as such, are not subject to income taxes. Rather, all items of taxable income, deductions and tax credits are passed through to and are reported by the owners on their respective income tax returns. The affiliated entities' federal tax status as pass-through entities is based on their legal status as partnerships or limited liability companies. Accordingly, these affiliated entities are not required to take any tax positions in order to qualify as pass-through entities. These affiliated entities are required to file and do file tax returns with the irs and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for federal income taxes for these affiliated entities. However, certain entities are located in the district of columbia, connecticut, new jersey and texas, which do not recognize flow through entities, and therefore, income for those entities is subject to tax. Those entities include woodmont crossing, wade road parkchester, takoma place, anacostia gardens, nannie helen owner, benning heights investor, columbia heights village, hollybush gp, orange gp, bayview preservation, cleme manor holdings, 1255 npo manager llc, 1300 npo manager llc, elm gardens mm llc, nhpf caroline mm llc, irvine turner mm, llc, and ridgecrest phase i manager, llc. Accordingly, these statements include a provision for state income taxes in the total amount of $41,237 and $69,425, respectively, for the years ended december 31, 2023 and 2022. These affiliated entities have no other tax positions which must be considered for disclosure. Income tax returns filed by these affiliated entities are subject to examination by the irs for a period of three years. While no income tax returns are currently being examined by the irs, tax years since 2020 remain open.”