Nonprofits may be allowed net interest deduction.(FTB)

California provides special tax incentives to encourage investment in Enterprise Zones specific areas within the state targeted for economic revitalization. One of these deduction available to banks and other lenders that make a qualified loan to a qualified debtor. A qualified transaction is a loan made to a debtor that is engaged in a "trade or business" in an Enterprise Zone. "Trade or business" is generally defined for tax purposes as "an activity engaged in for profit," but the FTB has revised its policy and nonprofits can be recognized as being engaged in a trade or business.

Learn more at www.calcpa.org/FTB_EZNonprofit.

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