Unrelated Business Income

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Posted on December 21, 2020

You may be familiar with the fact that even tax-exempt organizations have to pay tax on income from an activity that is regularly carried on if it is not substantially related to the organization’s exempt purpose.  This is known as “unrelated business income tax” or UBIT. Under the 2017 Tax Cuts and Jobs Act (“TCJA”), tax-exempt organizations have to calculate UBIT differently than before.   With clear examples and hypotheticals, this article very generally explains the changes under the TCJA, and how they might be relevant to your organization.

Posted on January 30, 2020

The Taxpayer Certainty and Disaster Tax Relief Act of 2019 became law on December 20, 2019. This Act repeals the section of the Tax Cut and Jobs Act (“TCJA”) that required §501(c)(3) organizations to pay unrelated business income tax on the costs of providing parking and MARTA passes to their employees. The repeal is retroactive to the original date of the TCJA, so no tax from 2018 to the present is owed.

Posted on December 19, 2017

Thrift shops are a popular way for nonprofit organizations to earn extra income. Whether your nonprofit is about to open the doors to your new thrift shop or you have been running one for years, this article raises some of the legal issues to consider.

Posted on April 17, 2017

Are you considering conducting commercial type activities – maybe a thrift store or a coffee shop, or selling goods or services of some kind? The IRS has developed short podcasts on various subjects to educate its employees and has made these podcasts available to the public. This podcast explains how the IRS evaluates commercial type activities when deciding whether to approve tax exemption or revoke tax exemption. It’s short (15 minutes long) and helpful.


Posted on June 14, 2013

Have you ever shopped at a store or eaten at a restaurant that was operated by a nonprofit? Many organizations that have 501(c)(3) tax-exempt status conduct such commercial business activities in order to provide training opportunities for clients and make money for their ongoing programming. Such organizations do not have to any pay Federal income taxes, right? Not necessarily. This article helps explain whether income generated through training programs is taxable as unrelated business income.

Posted on December 6, 2011

Need guidance on unrelated business income, especially what constitutes it? Read here!

Posted on December 6, 2011

Does your organization generate income from activities, including fundraising, that are not directly related to the basis of the organization’s exemption? The IRS has special rules for tax on that income that you need to know.

Posted on September 15, 2010

Nonprofits are exploring new ways to bring income to their organizations. Some of these income ideas may generate unrelated business income which may be taxable.

During this one hour webcast, our speakers:

  • Define unrelated business income.
  • Identify the risks of generating unrelated business income.
  • Discuss the exceptions and exemptions to unrelated business income.

Robyn Miller, Staff Attorney, Pro Bono Partnership of Atlanta
Timothy Phillips, Attorney, American Cancer Society

Click here to view the webcast.

Posted on November 18, 2009

Many nonprofits are considering social enterprise (a.k.a. social entrepreneurship or social ventures) as a way to expand their reach. With social enterprise, nonprofits use business models and entrepreneurial approaches to improve the common good and solve social problems in new and effective ways. For example, the Georgia Justice Project started a landscaping program in order to provide employment to its clients.

While some nonprofits see social enterprise as a way to reduce their dependence on charitable donations and grants, others view the business itself as the vehicle for social change. Either way, there are many complex legal and tax issues associated with such ventures.

During this one hour webinar, our speakers help nonprofits understand:

  • The legalities and realities of social enterprise
  • The tax ramifications of social enterprise
  • The pros and cons of social enterprise

Anne Andrews, Berman Fink Van Horn
Tim Phillips, American Cancer Society

Click here to view the webcast.