Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?
A) Majority of labor is performed by paid employees.
B) The business is carried on regularly.
C) It is operated for a profit.
D) Merchandise is donated.

Question

Quizplus · Accepted Answer

If merchandise is donated, it is considered to be a qualified sponsorship payment and is not subject to UBIT. However, if the donor receives any advertising or promotional benefit in exchange for the donation, it may be subject to UBIT. The other options (A, B, and C) are not conditions that would exempt income-producing activities from UBIT.

Which of the Following Conditions Would Exempt Income-Producing Activities from the Unrelated