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RELATED PARTY TRANSACTIONS AND FEES
 12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS AND FEES
NOTE 4. RELATED PARTY TRANSACTIONS AND FEES

 

The Advisory agreement provides for Pillar or a related party of Pillar to receive fees and cost reimbursements as defined in Part III, Item 10. Directors, Executive Officers and Corporate Governance – The Advisor. Cost reimbursements are allocated based on the relative market values of the Company’s assets. The Company and Pillar entered into an Advisory Agreement and Cash Management Agreement to further define the administration of the Company’s day-to-day investment operations, relationship contacts, flow of funds and deposit and borrowing of funds. The advisory fees and cost reimbursements paid to Pillar, TCI and related parties are detailed below (dollars in thousands):  

 

   Years Ended December 31,
Fees:  2020  2019  2018 
Advisory  $768   $737   $685 
Net income   371    357    631 
   $1,139   $1,094   $1,316 
                
Other Expense:               
Cost reimbursements  $247   $260   $284 
                
Revenue:               
Interest received  $3,583   $4,780   $3,086 
   $3,583   $4,780   $3,086 

 

As of December 31, 2020, IOR has notes and interest receivable of $13.9 million due from Unified Housing Foundation, Inc. and recognized interest income of $1.8 million related to these notes receivable. (See details in Part 2, Item 8, above, Note 3. Notes and Interest Receivable from Related Parties.)

 

The following table reconciles the beginning and ending balances of amounts receivable from related parties as of December 31, 2020 and 2019 (dollars in thousands): 

 

   TCI 
   2020   2019 
Balance, January 1  $86,221   $82,089 
Cash transfers   3,232    2,959 
Advisory fees   (768)   (737)
Net income fee   (371)   (357)
Cost reimbursements   (247)   (260)
Expenses paid by advisor   (4)   85 
TIF reallocation   0    (1,260)
Interest income   3,583    4,780 
Income tax   (1,120)   (1,078)
Balance, December 31  $90,526   $86,221 

 

IOR has a tax sharing and compensating agreement with respect to federal income taxes between ARL, TCI and IOR and their subsidiaries. The expense (benefit) in each year was calculated based on the amount of losses absorbed by taxable income multiplied by the maximum statutory tax rate of 21%. There were no payments under this agreement in 2020.