What is UBIT (Unrelated Business Income Tax)?
Nonprofit organizations are usually subject to unrelated business income tax (UBIT) on income from a trade or business which is regularly carried on and which is "unrelated" to its exempt purpose, it is critical to determine whether an activity is "related" to the organization’s exempt purpose.
To be substantially related, the activity must "contribute importantly to the accomplishment" of the exempt purposes.
For most Nonprofit organizations, an activity is an unrelated business (and subject to unrelated business income tax) if it meets three requirements:
. Volunteer Labor
. School Cafeterias and similar relationships
. Selling Donated Merchandise
More information on the following IRS links:
Here is My Monthly Nonprofit Podcast by Subscription ($9.95/month) with the exception of My Interviews with Nonprofit Organizations which are Free
To View Podcast Before Subscribing Press the Link Below!
Press Link to Subscribe Now!
60 second and 60 minute Education & Compliance Tidbits and Trainings to review at your leisure .... Updated Monthly