Friday, November 16, 2018
Harvard Crimson, Bacow Met With U.S. Treasury Representative to Discuss Endowment Tax Guidance:
University President Lawrence S. Bacow recently met with a U.S. Treasury Department official as the government prepares final regulations for taxing university endowments, Bacow said in an interview last month.
Harvard’s endowment, valued at $39.2 billion, qualifies for taxation under the new tax codes Republican lawmakers passed last year. The University's endowment was previously exempt from taxes because the school is a non-profit entity.
The University’s financial report released in October estimates that the tax will cost Harvard $40 million to $50 million annually. Harvard will have to pay the endowment tax for the first time on returns from this fiscal year, which ends in June 2019. ...
Experts have said that university endowment managers may change investment strategies to reduce tax burden, including considering when to sell assets. “It can affect both your choice of what to invest in, and also probably more importantly for Harvard, how often to sell,” Georgetown Law Professor Brian D. Galle ’94 said. “We only calculate the amount of taxable gain or loss on your investments in the year in which you sell or otherwise get rid of the property.”