Most listeners are probably aware that 501(c)(3) organizations are generally exempt from income tax, but this does not mean that all income generated See more +
Most listeners are probably aware that 501(c)(3) organizations are generally exempt from income tax, but this does not mean that all income generated by the organization is free of income tax. For most organizations, unrelated business income is defined as income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other exempt purpose that is the basis of the organization’s tax exemption.
In this episode, I’ll talk about these defined terms. In the next episode, I’ll explore the modifications to unrelated business taxable income that provide exceptions to income items that would otherwise fall into this definition of taxable income, but these are categorically excluded because they constitute generally passive income. In the third episode of this series, I’ll cover the exception to the exceptions for income that is debt-financed and thus generally is taxable income.
Show Notes: www.fbm.com/exempt-organizations/publications/nonprofit-basics-unrelated-business-income-tax-basic-rules-for-charities-part-1
If you have suggestions for topics you would like us to discuss, please email us at [email protected]. Additional episodes can be found at EORadioShowByFarella.com.
DISCLAIMER: This podcast is for general informational purposes only. It is not intended to be, nor should it be interpreted as, legal advice or opinion.
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