Unrelated Business Income

Free CPA TCP (Tax Compliance & Planning) lesson in Entity Tax Compliance. 17 min read, ~2,598 words.

UBI arises when a tax-exempt organization conducts a trade or business, regularly carried on, not substantially related to its exempt purpose. Passive investment income (dividends, interest, royalties, rents from real property) is generally excluded from UBI unless debt-financed. Rents based on net income or profits lose the passive exclusion and...