Is there any difference in tax treatment to running a service directly through the credit union under Incidental Powers or through a limited liability company (“LLC”) CUSO?
The answer is no. The LLC is a disregarded tax entity and therefore the answer as to whether any tax is due is determined solely by the tax status of the credit union. In situations where the choice is using the credit union’s Incidental Powers or using a CUSO formed as an LLC the income tax issue is neutral. The UBIT issue is neutral as well. If UBIT is due from a state chartered credit union who has services running through their CUSO, it will also be due if the services are run through the credit union under Incidental Powers.
Related Questions
- Is there any difference in tax treatment to running a service directly through the credit union under Incidental Powers or through a limited liability company ("LLC") CUSO?
- Is it possible to have back the customer counters where tax installment can be paid directly, because the Postal Service and banks charge high commission?
- What are the factors that determine whether the credit union should produce revenue directly under Incidental Powers or through a CUSO?
