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Abstract: 

Can a grant be a program-related investment? Sometimes yes, says the IRS in PLR 200347017. There, a grant from a foundation to a wholly owned for-profit reinsurance company was so classified where the purpose was to facilitate the availability of medical malpractice reinsurance, thereby helping assure that medical care would continue to be available to residents of a specific state. Although physicians within the state will benefit from the activities of Reinsurance Company (through the availability of medical malpractice insurance at commercially reasonable rates), the benefit to physicians is incidental to the attainment of F’s exempt purpose of promoting the health of the community.

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