Cdu Foundation

PART X, LINE 2:

“The university is an organization exempt from taxation under section 501(c)(3) of the internal revenue code and section 23701d of the california revenue and taxation code, and is generally not subject to federal or state income taxes. However, the university is subject to income taxes on any net income that is derived from a trade or business, regularly carried on, and not in furtherance of the purpose for which it is granted exemption. No income tax provision has been recorded as the net income, if any, from any unrelated trade or business, in the opinion of the university's management, is not material to the financial statements taken as a whole. The university accounts for the uncertainty in income taxes in accordance with an interpretation issued by the financial accounting standards board, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. This guidance requires the evaluation of tax positions taken or expected to be taken in the course of preparing the univeristy's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are required to be recorded as a tax benefit or expense in the current year. Additionally, this interpretation provides guidance on de-recognition, classification, interest and penalties, disclosure and transition. The university had no uncertain tax positions that were not considered more-likely-than-not of being sustained by applicable tax authorities as of both june 30, 2021 and 2020.”