The organization Shelter the Needy is completing its Form 990 and it is trying to determine if it has unrelated business income on which it must pay taxes. Which of the following would be subject to unrelated business income taxes?
A) The Shelter sold art work it had received as a donation.
B) Volunteers raised several thousand dollars in a marathon sponsored for the benefit of the Shelter.
C) The Shelter earned revenues from the self-service laundry facilities it provides for the benefit of tenants of its low-income temporary housing facilities.
D) None of the items listed would be subject to unrelated business income taxes.

Question

Quizplus · Accepted Answer

The activities listed (A, B, and C) are either related to the organization's exempt purpose, are volunteer-driven, or involve the sale of donated goods, all of which are generally excluded from unrelated business income tax (UBIT) according to IRS rules for nonprofits.

The Organization Shelter the Needy Is Completing Its Form 990