Cornell University ("the University") finances capital projects with various sources of funds, including gifts, operating income, state appropriations, and debt issued in the form of taxable and tax-exempt bonds, notes, and commercial paper. The Internal Revenue Service (IRS) regulations permit nonprofit entities to issue tax-exempt debt contingent upon use of the facilities to further the charitable nonprofit purposes.
Any use of tax-exempt debt funded facilities by or for the benefit of private parties is referred to as “.” IRS regulations set strict limits on the amount of private use permitted in tax-exempt funded facilities: 5% for debt issued by nongovernmental nonprofits.
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