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 sells donated merchandise.
C) The business is carried on regularly but is unrelated to the organization's tax-exempt purpose.
D) The business is operated for a profit.

Question

Quizplus · Accepted Answer

The existence of one or more of the following conditions will exempt income-producing activities from UBIT: 1) The business is not regularly carried on, 2) volunteers perform most of the labor, 3) the not-for-profit sells donated merchandise, and 4) it is operated for the convenience of employees, patients, students, etc. 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 Conditions Would Exempt Income-Producing Activities from the Unrelated