Related organizations

1. Costs applicable to services, buildings, equipment, and supplies furnished to a facility by a related organization may not exceed the lower of the costs to the related organization or the price of comparable services, buildings, equipment, or supplies purchased elsewhere primarily in the local market. A facility must identify such related organizations and costs. If any such costs are allocated, the allocation methods and statistics supporting the allocations must be submitted with the cost report. 2. A facility may lease buildings or equipment from a related organization within the meaning of ratesetting principles. In such a case, the rent paid to the lessor by the facility is not allowable as cost unless the rent paid is less than the allowable costs of ownership. If rent paid exceeds the allowable costs of ownership, the facility may include only the allowable costs of ownership. These costs are property insurance, depreciation, interest on the mortgage, real estate taxes, and plant operation expenses incurred by the lessor.