Which of the following is true concerning with respect to unrelated business income?
A) They may deduct the first $1,000 of unrelated business income.
B) They must include income from donated merchandise.
C) They must include investment income in computing their tax liability.
D) None of the above.

Question

Quizplus · Accepted Answer

When computing the unrelated business income tax, not-for-profit organizations are allowed to deduct ordinary and necessary business expenses directly connected with their trade or business, a $1,000 special deduction, charitable contributions, and many of the other deductions available to business organizations. Certain activities are exempt from UBIT. One of them is income from selling donated merchandise. In addition to certain activities being exempt from UBIT, certain exceptions have been provided in legislation. One of the exceptions is income from royalties, dividends, interest and annuities except from controlled corporations) are not included in come.

Which of the Following Is True Concerning with Respect to Unrelated