True Ground Housing Partners

fin 48

“APAH and its subsidiaries, Buchanan Gardens II, LLC, Cameron Commons Development Corporation, Carlyn Springs/Foxcroft Terrace Development Corporation, Fisher House Development Corporation, Queen's Court Development Corporation, and Rosslyn Ridge Development Corporation have applied for and received a determination letter from the Internal Revenue Service ("IRS") to be treated as a tax exempt entity pursuant to Section 501(c)(3) of the Internal Revenue Code. Due to their tax exempt status, APAH and Subsidiaries are not subject to income taxes, except for taxes on unrelated business income. APAH did not have unrelated business income for the year ended December 31, 2013. APAH and Subsidiaries 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 for APAH and its exempt Subsidiaries and they have no other tax positions which must be considered for disclosure. Each of the organizations except Barkalow Limited Liability Company, Buchanan Gardens II, LLC and Marbella Development LLC, file separate tax returns. Barkalow Limited Liability Company, Buchanan Gardens II, LLC and Marbella Development LLC are single member Limited Liability Companies which are not recognized for Federal income tax purposes. Barkalow Limited Liability Company and Buchanan Gardens II, LLC's activities are reported on APAH's income tax return. Marbella Development LLC's activities are reported on Rosslyn Ridge Development Corporation's tax return. Columbia Grove, Inc. is a corporation and accounts for income taxes using the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying and tax bases of assets and liabilities. A valuation allowance is recorded if, based upon the evidence available, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Arlington Mill Limited Partnership, Buchanan Gardens Limited Partnership, Calvert Manor Limited Partnership, Columbia Grove Apartments Limited Partnership, Courthouse Crossings Limited Partnership, Fisher House, LP, Lorcom Arms Limited Partnership, and Rosslyn Ridge Apartments Limited Partnership (the "Limited Partnerships") 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 their owners on their respective income tax returns. The Limited Partnerships' federal tax statuses as pass-through entities are based on their legal status as partnerships. Accordingly, the Limited Partnerships are not required to take any tax positions in order to qualify as a pass-through entity. The Limited Partnerships are required to file and do file tax returns with the Internal Revenue Service and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for income taxes for the Limited Partnerships and they have no other tax positions which must be considered for disclosure. Income tax returns filed by the Limited Partnerships are subject to examination by the Internal Revenue Service for a period of three years. While no income tax returns are currently being examined by the Internal Revenue Service, tax years since 2010 remain open.”