Metropolitan Club

Part X : FIN48 Footnote

“Footnote from the september 30, 2019 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 the years ended september 30, 2010, 2011, 2012, 2013, 2014 and 2015. The ftb concluded that contributions received from the 640 heritage preservation foundation (the "foundation") should be included in unrelated business taxable income ("ubti") and has issued the club notices of proposed assessments for these year which, if agreed to by the club, would include approximately $232,000 in additional taxes, plus interest and penalties. The club is protesting these proposed assessments.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, 2019. Management believes the maximum exposure is limited to the $232,000, the amount requested by the ftb, plus interest and penalties.the club's form 990-t for the years ended september 30, 2018 and 2019 remain subject to possible examination by the internal revenue service ("irs").the club's form 109 for the years ended september 30, 2016, 2017, 2018 and 2019 remain subject to possible examination by the ftb.the club's form 990 for the years ended september 30, 2018 and 2019 remain subject to possible examination by the irs.the club's form 199 for the years ended september 30, 2016, 2017, 2018 and 2019 remain subject to possible examination by the ftb.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 believes 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, 2019.parts i,ii,iii, iv, v, vii, viii, ix, xi and xii:not applicable”