CPE Course Library

2 hours

The Unrelated Business Income Tax

Course Description

Nonprofits have a fear. Nonprofits have a misunderstanding. Nonprofits need guidance.

In 1950 Congress created the unrelated business income tax (UBIT), because it did not want nonprofits to have advantages over taxable entities that conduct the same activities. The tax was used to penalize nonprofits for engaging in excessive unrelated business activities.

The law is confusing and is often misinterpreted by organizations and their tax professionals. Most organizations have unrelated business income (UBI), but not all of the UBI is considered unrelated business taxable income (UBTI). Many organizations that have UBTI will not have to pay unrelated business income tax (UBIT), because they have related deductions that offset the income.

Topics Covered:

  • What constitutes a trade or business
  • Analysis of specific forms of UBI and UBTI
  • Case studies regarding advertising revenue
  • Statutory exclusions from UBTI
  • Religious organizations and UBTI issues
  • Unrelated debt finance income
  • Preparation of Form 990-T — overview of the form by lines and schedules

Learning Objectives:

  • Understand the differences between UBI, UBTI, and UBIT
  • Effectively plan for activities and advise clients
  • Determine recent tax law developments that impact on unrelated business taxable income
  • Understand Internal Revenue Service policies and practices as they relate to enforcement of the UBIT

Delivery Method: Self Study
Field of Study: Other Federal Tax
Prerequisites: None
Advance preparation: None
Program Level: Basic
Expiration: In accordance with NASBA standards, access to this course will terminate one year from the date of purchase. Incomplete courses will no longer be accessible beyond the one year deadline.

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