Fox Tucson Theatre Foundation

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“Fin 48 (asc 740) footnote from consolidated financial statements: foundation is exempt from income taxes under both federal (internal revenue code section 501(c)(3)) and arizona income tax laws, and is classified as other than a private foundation. The organization is required to pay income taxes on its unrelated net rents arising from a lease on property financed by debt. Prior year net operating loss carryovers offset the unrelated business taxable income during 2016. Accordingly, no provision for federal and state income taxes is made. Presents and theatre have elected to be classified as associations and, therefore, are taxable as corporations. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Management has not recorded any benefit from the deferred tax asset resulting from net operating losses as its realization is not assured. Gaap requires management to perform an evaluation of all income tax positions taken or expected to be taken in the course of preparing the organization's income tax returns to determine whether the income tax positions meet a "more likely than not" standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. Presents and theatre: presents and theatre are required to file federal and state income tax returns. Management has performed its evaluation of income tax positions taken on all open tax years and has determined that there were no positions taken that do not meet the "more likely than not" standard. Accordingly, there are no provisions for income taxes, penalties or interest receivable or payable relating to uncertain income tax provisions in the accompanying financial statements. From time to time, the organization may be subject to interest and penalties assessed by various taxing authorities, which have historically been insignificant. Penalties are classified as other expenses and interest as interest expense if they occur.”