Which of the following statements regarding low-cost articles is correct?
A) The distribution of low-cost articles can be classified as not being an unrelated trade or business.
B) For 2014, a low-cost article is one that costs $10.40 or less.
C) Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income.
D) Only a. and b. are correct.
E) a., b., and c. are correct.

Question

Quizplus · Accepted Answer

Option A is correct - the distribution of low-cost articles is generally not considered an unrelated trade or business. 
Option B is correct - for 2014, a low-cost article was defined as costing $10.40 or less. 
Option C is incorrect - contributions received as a result of the distribution of low-cost articles must be related to the exempt purpose of the organization and are not automatically considered unrelated business income. Therefore, only options A and B are correct.

Which of the Following Statements Regarding Low-Cost Articles Is Correct