Metropolitan Club

“Footnote from the september 30, 2017 reviewed financial statements: "the club identifies and evaluates all uncertain tax positions and believes that positions taken are more-likely-than-not to be sustained upon examination for all open tax years. The club is currently being audited by the california franchise tax board (ftb"). The years in question are september 30 2010, 2011 and 2012. The ftb completed its examination in september 2015 and sent the club a determination letter concluding that contributions received from the 640 heritage preservation foundation (the "foundation") should be included in unrelated business taxable income ("ubti"). The ftb has issued the club a notice of proposed assessment for these years which, if agreed to by the club, would include approximately $76,000 in additional taxes, plus interest and penalties. The club is contesting these proposed assessments. In october 2016, the ftb sent the club a notice of proposed assessment for the years ended september 30, 2013 and 2014, indicating that monies received by the club during those years from the foundation were also subject to ubti taxes. The additional proposed assessment totals approximately $93,000. The club is contesting these proposed assessments. In june 2017, the ftb sent the club a notice of proposed assessment for the year ended september 30, 2015, indicating that monies received by the club during the year from the foundation were also subject to ubti taxes. The additional proposed assessment totals approximately $63,000. The club is contesting this proposed assessment. The club has determined that excluding contributions received from the foundation from ubti is an uncertain tax position. Management has concluded that contributions received from the foundation are not subject to ubti taxes and that no tax provision should be recorded in the financial statements. Based on this decision, no provision for income taxes has been recorded in the financial statements for the year ended september 30, 2017. Management believes the maximum exposure is limited to the $232,000, the amount requested by the ftb. The club's form 990-t for the years ended september 30, 2010, 2011, 2012, 2013, 2014, 2015, 2016 and 2017 remain subject to examination by the internal revenue service ("irs"). The club's form 109 for the years ended september 30, 2016 and 2017 remain subject to examination by ftb. The club's form 990 for the years ended september 30, 2014, 2015, 2016 and 2017 remain subject to examination by the irs. The club's form 199 for the years ended september 30, 2013, 2014, 2015, 2016 and 2017 remain subject to examination by the irs. Management's conclusions regarding uncertain tax positions may be subject to change at a later date based upon ongoing analysis of tax laws, regulations and interpretations thereof, as well as other factors. The club believe that positions taken are more-likely-than-not to be sustained upon examination. Therefore, no income tax-related interest or penalties were recorded for the year ended september 30, 2017."”

“NOT APPLICABLE”