Private Activity Bond (PAB)
The term used in the Code to describe any bond issued as part of a bond issue that meets both of the private business tests or meets the private loan financing test.
bond-basics
Qualified 501(c)(3) Bonds
501(c)(3) Organizations are permitted to finance projects with Tax-Exempt Bonds if they meet the requirements of Section 145 of the Code. These requirements include (1) all property that is to be provided by the Net Proceeds of the Bonds must be owned by a 501(c)(3) Organization or by a governmental unit; (2) the Private Business Tests under Section 141(b) of the Code must not be satisfied, treating the 501(c)(3) Organization which is the Conduit Borrower and any other 501(c(3) Organization using the Bond-financed facilities as a governmental unit with respect to its activities that do not constitute an unrelated trade or business with respect to its respective exempt purpose and by substituting 5% for 10% in the private business use tests; and (3) the Private Loan Financing Test must not be met.
See Also
501(c)(3) Organization
An organization that is exempt from federal income taxation under Section 501(a) of the Code.
Conduit Financing
Financing in which the Issuer issues the bonds to finance a project to be used primarily by a third party.
Related
On the Application of PBU Rules to Modern Technologies
Comments to the IRS requesting written guidance on the application of the private business use rules related to modern technologies.
Tracking Tax Reform in 2025
Congress is focused on addressing the pending expirations of the Tax Cuts and Jobs Act (TCJA) prior to the end of this calendar year. Here’s where things stand and what…
Protecting Tax-Exempt Municipal Bonds
Letter sent by the Public Finance Network (PFN), including NABL, to members of the 119th Congress in support of the tax exemption on municipal bonds.
The Workshop 2023: Session Bundle
All recorded sessions from our 2023 annual conference held in Chicago, IL from October 18 – 22. [[Purchase or Registration Required]]
Private Activity Bond Tests: Real World Challenges
Panel that addresses complex issues encountered from time to time in the identification and allocation of private business use of bond-financed property.
Health Care Facilities — Hot Topics (Non-Tax Matters)
Examination of non-tax issues for financings of 501(c)(3) healthcare providers and analysis of other hot topics in healthcare finance.
Start with the Bond Basics
Hundreds of Terms and Concepts
Qualified Small Issue Bond
A type of private activity bond (PAB) permitted under Section 144(a) of the Code of under $1,000,000 in face value to finance certain projects relating to manufacturing facilities.