Unrelated Business Income

About Unrelated Business Income:

Unrelated Business Income (UBI) is the income from a trade or business that is not substantially related to a not-for-profit organization's tax-exempt function and that is regularly carried on by the organization. Annuities, interest, royalties, and rent from real and certain personal property are specifically excluded from the definition of unrelated business income. A corporate tax is imposed on UBI in excess of $1,000 in order to place the tax-exempt organization on an equal footing with taxable organizations with respect to their business operations. Examples of taxable UBI are advertising income from a publication, the sale of donor or member lists to a taxable entity, and the sale of T-shirts, mugs, pens, and similar items. Former IRC (check if this IRC provision is current here) §§511 and 512.

See Corporate Tax in the U.S. Legal Encyclopedia and Corporate Tax in the International Legal Encyclopedia.