Unrelated Business Income Tax: Not-for-Profit Tax Compliance
A not-for-profit (NFP) may be liable for federal income taxes if it generates certain types of income from business activities that are unrelated to its tax-exempt purpose or mission. Common examples include sales of merchandise, provision of services to unrelated entities, advertising, leasing of facilities, and certain investment income.
This CPE course provides an overview of the tax compliance issues related to unrelated business income taxes (UBIT). You will learn about the various types of activities that may result in UBIT and the common statutory exceptions and exclusions available under federal tax law.
- When you complete this course, you will be able to:
- Differentiate between unrelated business income and other types of income received by NFPs
- Recall the three criteria to determine whether income is subject to UBIT
- Identify the statutory exceptions to UBIT
- Recall the specific requirements and exceptions that apply to investment and debt-financed income
- Identify the basic IRS filing requirements related to UBIT
- Meaning of exempt purpose
- Related vs. unrelated activities
- Definition of unrelated business income
- Consequences of excessive unrelated business income
- Exempt vs. non-exempt income
- Statutory exemptions and exclusions
- IRS Filing Requirements