Housing Solutions for the Southwest Inc.

“The organization is exempt from income tax as provided under section 501(c)(3) of the internal revenue code, except on net income derived from unrelated business activities. The organization adopted accounting requirements that prescribe when to recognize and how to measure the financial statement effects of income tax positions taken or expected to be taken on its income tax returns, including the position that the organization continues to qualify to be treated as a tax-exempt organization for both federal and state income tax purposes. These rules require management to evaluate the likelihood that, upon examination by relevant taxing jurisdictions, those income tax positions would be sustained. Based on that evaluation, if it were more than 50% probable that a material amount of income tax would be imposed at the entity level upon examination by the relevant taxing authorities, a liability would be recognized in the accompanying balance sheet along with any interest and penalties that would result from that assessment. If the organization has unrelated business income, the federal exempt organization business income tax returns (form 990t) would be subject to examination by the internal revenue service for three years after filing. Should any penalties and interest be incurred, they would be recognized as management and general expenses. Based on the results of managements evaluation, the requirements did not have a material effect on the organizations financial statements. Consequently, no liability is recognized in the accompanying balance sheet for uncertain income tax positions. The organization's federal return of organization exempt from income tax (form 990) for 2011, 2012 and 2013 are subject to examination by the internal revenue service generally for three years after they are filed.”

“Unrelated business income - reported on form 990-t”

“Unrelated business expenses - reported on form 990-t”