Unrelated Business Income

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Unrelated Business Income

Income a nonprofit organization produces on a regular basis from a trade or business that is not connected to its ordinary operations. For example, a charity may sell t-shirts at a profit to the general public. While there are a number of exemptions, the IRS taxes unrelated business income at ordinary corporate tax rates.
References in periodicals archive ?
After reducing their gross unrelated business incomes by allowable deductions, only about half of the 43,520 organizations that were required to file Form 990-T reported unrelated business income tax liability for Tax Year 2006.
Generally, organizations that were organized as tax-exempt trusts derived larger percentages of their gross unrelated business incomes from investments.
Overall, trusts reported 93 percent of their gross unrelated business incomes as investment income, compared to less than 15 percent for corporations.
Gross unrelated business income reported by charitable and other types of tax-exempt organizations increased 4 percent between Tax Years 2005 and 2006.
After reducing their gross unrelated business incomes by allowable deductions, only about half of the 40,676 organizations that were required to file Form 990-T reported unrelated business income tax liability for Tax Year 2005.
Generally, tax exempt trusts pay taxes on their unrelated business incomes at the same rates as estate and trust filers, while all other exempt organizations pay taxes at the corporate rate.
Gross unrelated business income reported by charitable and other types of tax-exempt organizations increased 14 percent between Tax Years 2004 and 2005, surpassing $10 billion for the first time.
The majority of all organizations, 63 percent, that filed Form 990-T for Tax Year 2005 reported gross unrelated business income of $10,000 or more.
Most VEBA's are formed as trusts, and, like the section 401(a) and 408(e) trusts, a large portion of their unrelated business incomes come from investments.
Unrelated business income is subject to taxation under the Internal Revenue Code.
Unrelated business (positive) taxable income (UBTI) and the associated unrelated business income tax (UBIT) reported on Form 990-T dropped sharply for Tax Year 2001.
0 million of unrelated business income tax, plus $0.