Part IV - Management Companies and Joint Ventures

This question and its instructions would benefit from further clarification by the IRS.

The instructions state that for a joint venture or separate entity to be included on this portion of Schedule H, it must meet a three-part test. If any one of these tests fails, then the entity should not be reported here.

1) Is the filing organization a partner or shareholder in a management company or a joint venture in which officers, directors, trustees, key employees or staff physicians have an ownership interest?

2) Do these specific identified persons own, in aggregate, more than 10% of the share of the profits of such joint venture or stock of such corporation? Ownership by physicians [u]employed by[/u] or physicians [u]who had staff privileges[/u] with one or more of the organization's hospitals must be considered.

3) Does the joint venture or management company provide management services to the organization in its provision of medical care or does it provide medical care, or does it own or provide real property, tangible personal property, or intangible personal property used by the filing organization or others to provide medical care?

If the joint venture or management company meets all three of these tests, it should be included on this part of the Schedule H.

Organizations should carefully examine their joint venture relationships to determine if they should be listed on this part of the Schedule H. We have included a flowchart below to help organization's determine whether a joint venture should be listed. The tests indicated above have been rearranged to more quickly eliminate joint ventures that should not be included.


To access the instructions for Schedule H click here.

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