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Imposing federal income tax on UBTI levels the playing field so that tax-exempt organizations are not using their tax-free profits or borrowing against their tax-free profits to expand operations into areas unrelated to their exempt purpose, in competition against for-profit corporations.
Research that includes health care to patients, scientific research in the public interest, or testing for the safety of the general public, should not be viewed as generating UBTI.
IRC [sections]512 (b)(12)] The IRS, however, takes the position that any amount of UBTI is fatal to a CRT's exemption.
no UBTI will result from gains from real estate purchased through seller financing), except for participating loans, which are explained above.
UBTI does not include dividends, and accordingly, tax-exempt organizations generally pay no income tax on dividends.
Aimco previously owned a residual interest in a real estate mortgage investment conduit ("REMIC"), which periodically generated an immaterial amount of excess inclusion income, which is generally required to be treated as UBTI by tax-exempt organizations.
This exclusion applies even if such a trust may be subject to a tax on unrelated business taxable income (UBTI) and even if that UBTI contains net investment income.
The IRS issued final regulations modifying the regime for UBTI received by CRTs.
The number of organizations filing Forms 990-T increased about 5 percent, with the number reporting positive UBTI increasing 16 percent.
Distributions, dividends to the shareholders, would not be subject to tax when received by the tax-exempt hospitals because such entities are taxable only on unrelated business taxable income (UBTI) (see IRC [section] 512) and dividends are specifically excluded from UBTI (see IRC [section] 512(b) (1)).
Excess inclusion income may be characterized as unrelated business taxable income ("UBTI") to the Company's tax-exempt investors although the determination of whether such income is UBTI is based on a facts and circumstances analysis by the investor.