Looking for a Form 8038 Templates? Download it for free!

gross income under section 103 of the

(d) that does not meet the private

such issue are to be used for

business tests of sections 141(b)(1)

construction expenditures with respect

Internal Revenue Code.

to property which is to be owned by a

and (2).

Generally, bonds are treated as part of

governmental unit or a 501(c)(3)

the same issue if they are issued by the

A qualified small issue bond is part

organization, and (b) all of the bonds

of an issue not exceeding $1 million of

same issuer, on the same date, and in a

that are part of such issue are qualified

single transaction, or series of related

which 95% or more of the net proceeds

501(c)(3) bonds; bonds that are not

transactions.

are to be used to finance (a) land,

private activity bonds; or private activity

(b) depreciable property, or (c) a

A private activity bond is generally

bonds issued to finance property to be

redemption of a prior issue of (a) or (b).

part of an issue of which (a) more than

owned by a governmental unit or a

See section 144(a). The $1 million limit

10% of the proceeds are to be used for

501(c)(3) organization. In lieu of rebating

can be increased to $10 million if an

any private business use, and (b) more

any arbitrage that may be owed to the

election is made to take certain capital

than 10% of the payment of the

United States, the issuer of a

expenditures into account. See

principal or interest is either secured by

construction issue may make an

Regulations section 1.103-10(b)(2)(vi).

an interest in property to be used for a

irrevocable election to pay a penalty.

private business use (or payments for

A qualified student loan bond is part

The penalty is equal to 1

⁄

% of the

of an issue of which (a) 90% or more of

such property), or is to be derived from

amount of construction proceeds that do

payments for property (or borrowed

the net proceeds are to be used to

not meet certain spending requirements.

money) used for a private business use.

make or finance student loans under a

See section 148(f)(4)(C).

program of general application to which

A bond is also considered a private

activity bond if the amount of the

the Higher Education Act of 1965

Specific Instructions

applies (see section 144(b)(1)(A) for

proceeds to be used to make or finance

loans (other than loans described in

additional requirements), or (b) 95% or

Part I—Reporting Authority

section 141(c)(2)) to persons other than

more of the net proceeds are to be used

to make or finance student loans under

governmental units exceeds the smaller

Amended return.—If you are filing an

of 5% of the proceeds, or $5 million.

a program of general application

amended Form 8038, check the

approved by the state (see section

An exempt facility bond is part of an

amended return box. Complete Part I

144(b)(1)(B) for additional requirements).

issue of which 95% or more of the net

and only those parts of Form 8038 you

proceeds are to be used to finance an

A qualified redevelopment bond is

are amending. Use the same report

exempt facility listed in section 142(a)(1)

generally part of an issue of which 95%

number (line 4) that was used on the

or more of the net proceeds are to be

through (12).

original report. (Do not amend the

used to finance certain specified real

estimated amounts previously reported

Note: The Revenue Reconciliation Act of

property acquisition and redevelopment

once the actual amounts are

1993 created a new category of exempt

in blighted areas. See section 144(c) for

determined.)

facility pr ivate activity bonds—qualified

other requirements.

enterpr ise zone facility bonds for use in

Line 1.—The issuer’s name is the name

empower ment zones and enterpr ise

A qualified 501(c)(3) bond is any

of the entity issuing the bonds, not the

private activity bond meeting the

communities. Nine empowerment zones

name of the entity receiving the benefit

and 95 enterpr ise communities have

following conditions: (a) all property

of the financing.

been designated (by the Secretaries of

financed by the net proceeds of the

Line 2.—An issuer that does not have

HUD and Agriculture) from areas

bond issue is to be owned by a 501(c)(3)

an EIN should apply for one on Form

nominated by state and local

organization or a governmental unit, and

SS-4, Application for Employer

(b) the bond would not be a private

governments. Qualified enterprise zone

Identification Number. This form may be

facility bonds may only be issued while a

activity bond if section 501(c)(3)

obtained from most IRS and Social

zone designation is in effect, which

organizations were treated as

Security Administration offices. File Form

governmental units and the private

generally will be a per iod of 10 years.

SS-4 according to the instructions on

These bonds are fully subject to the

activity bond definition was applied

that form. If the EIN has not been

using a 5% threshold (instead of 10%).

state pr ivate activity bond limitations.

received by the due date for Form 8038,

Restrictions apply to the use of

A qualified mortgage bond is part of

write “Applied for” in the space for the

an issue (a) of which all proceeds

qualified 501(c)(3) bonds (both hospital

EIN.

(except issuance costs and reasonably

and nonhospital) to provide residential

Line 4.—Number reports consecutively

rental housing. See section 145(d).

required reserves) are to be used to

based on the filing date (not the issue

finance owner-occupied residences,

A qualified hospital bond is any

date). For example, if the issuer already

(b) that meets the requirements of

qualified 501(c)(3) bond that is part of an

filed two Forms 8038 in the 1995

subsections (c) through (i) and (m)(7) of

issue of which 95% or more of the net

calendar year, the report number for the

section 143, (c) that does not meet the

proceeds are to be used for a hospital.

third Form 8038 would be “PA1995-3.”

private business tests of sections

A qualified 501(c)(3) nonhospital

Line 6.—Enter the date of issue. This is

141(b)(1) and (2), and (d) for which

bond is a qualified 501(c)(3) bond other

generally the date on which the issuer

repayments of principal on financing

than a qualified hospital bond. An

physically exchanges the bonds for the

provided by the issue (that are received

organization cannot have more than

underwriter’s (or other purchaser’s)

more than 10 years after the date of

$150 million of qualified 501(c)(3)

funds.

issuance) are used to redeem bonds that

nonhospital bonds. See section 145(b).

Line 7.—Enter the name of the issue. If

are part of the issue. Amounts of less

Arbitrage rebate.—Generally, interest

there is no name, please provide other

than $250,000 need not be used to

on a state or local bond is not tax

identification of the issue.

redeem bonds under requirement (d).

exempt unless the issuer of the bond

Line 8.—Enter the CUSIP (Committee on

A qualified veterans’ mortgage bond

rebates to the United States arbitrage

Uniform Securities Identification

is part of an issue (a) of which 95% or

profits earned from investing proceeds

Procedures) number of the bond with

more of the net proceeds are to be used

of the bond in higher yielding

the latest maturity. If the issue does not

to provide residences for veterans,

nonpurpose investments. See section

have a CUSIP number, write “None.”

(b) for which the payment of the

148(f).

principal and interest is secured by the

A construction issue is an issue of

general obligation of a state, (c) that

tax-exempt bonds if (a) at least 75% of

meets the requirements of subsections

the available construction proceeds of

(c), (g), (i)(1), and (l) of section 143, and

Page 2

Instructions For Form 8038 (Rev. March 1995) - Information Return For Tax-Exempt Private Activity Bond Issues Page 2

Related Articles

Related forms

Related Categories