Last month, we published a post on the recently revised IRS EO Technical Guide: Disqualifying and Non-Exempt Activities, Inurement and Private Benefit. This month, we share some excerpts from the Exempt Organizations Technical Guide: Disqualifying and Non-Exempt Activities – Trade or Business Activities – IRC Section 501(c)(3). This Technical Guide (TG) addresses the issue of […]
UBTI
Unrelated Business Taxable Income – What Doesn’t Count?
Revenues created by business ventures of nonprofits can result in unrelated business taxable income (“UBTI”) subject to the unrelated business income tax (“UBIT”), but it’s important to understand that not all revenues generated by unrelated businesses are subject to UBIT. And to be clear, if you have no UBTI, you owe no UBIT. We have […]
Unrelated Business Income Tax Explained
In order to qualify as a tax-exempt organization under IRC Section 501(c)(3), an organization must be operated primarily for tax-exempt purposes. This parameter allows such nonprofit organizations to engage in a limited amount of business activity unrelated to the organization’s exempt purposes. Although a public charity generally does not pay taxes on income from activities […]