The Pacific Club

“Fine art items consist of art objects that are held for educational, historical and curatorial purposes. Each of the items is cataloged, preserved and cared for, and activities verifying their existence and assessing their condition are performed continuously. Fine art items are protected, cared for and preserved, and therefore not depreciated. Purchased fine art items are recorded at cost. Donations of fine art have not been reported in the financial statements since the fair values at the dates of donation were not readily determinable. Gains and losses from deaccessions are reported as changes in net assets based on the absence or existence and nature of member-imposed restrictions. It is the intent of the club that proceeds from the sale of any fine art items are to be used to purchase additional collection items. The carrying amount of fine art at december 31, 2020 and 2019 was $837,566 and $699,803, respectively.”

“The club holds various paintings and sculptures that are publicly exhibited to promote the friendship and the mutual exchange of opinions among its members.”

“The club is a nonprofit organization exempt from federal income taxes under section 501(c)(7) of the internal revenue code. The club is also exempt from state income taxes. However, unrelated business income earned by the club is taxable and includes income from investments and income from non-members or the general public less allowable expenses directly connected to the production of such income. No provision has been made for federal income tax because the club anticipates its allowable expenses will exceed unrelated business income. The club recognizes the financial statement effects from a tax position only after determining that the relevant tax authority would more likely than not sustain the position after an audit based on the technical merits of the position. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require significant judgment to apply. Management has evaluated the club's tax positions and concluded that the club has taken no uncertain tax positions that require adjustment to the financial statements. Penalties and interest, if any, are included in administrative and general expenses.”

“Cost of goods sold 943,347.”

“Cost of goods sold 943,347. Fica tax withheld on creditable tips 49.”