Unrelated Business Income Defined
For most organizations, an activity is an unrelated business (and subject to unrelated business income tax) if it meets three requirements:
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It is a trade or business,
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It is regularly carried on, and
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It is not substantially related to furthering the exempt purpose of the organization.
There are, however, a number of modifications, exclusions, and exceptions to the general definition of unrelated business income.
Additional Information:
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Publication 598, Tax on Unrelated Business Income of Exempt Organizations
Page Last Reviewed or Updated: 02-Aug-2012
