WASHINGTON — A state-chartered credit union with a majority stake in a CUSO will not owe unrelated business income tax on interest or rental income received from its CUSO under certain conditions.
The stipulation comes under a provision of the Pension Protection Act of 2006, which became law Aug. 16. CUNA reports that state-chartered credit unions with over 50% interest in a CUSO may be eligible for a bit of a tax break on their 2006 and 2007 tax returns. The tax relief only applies to rental and loan contracts in place on Aug. 17, 2006 and only for the 2006 and 2007 tax years.
CUNA said Congress has to reconsider many of its "temporary" tax provisions in the next few years, so this one could eventually extend beyond 2007. The IRS has given CUNA no timetable on when to expect agency guidance on what credit union products and services might be subject to UBIT, the trade group reported.
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