UBIT exceptions let non-profits run tax-free businesses
Article Abstract:
The unrelated business income tax (UBIT) was introduced through the Revenue Act of 1950 to prevent unfair competition made by many taxable organizations. According to Sec. 512(1)(1), there should an unrelated trade or business that is regularly carried on for a UBI to exist. The rules on UBIT identify seven exceptions to the definition of UBI which exempted organizations should take advantage of in terms of tax planning. The seven exceptions are volunteer exception, convenience exception, bingo exception, convention and trade show exception, public entertainment exception, contributed property exception and low-cost item exception. Organizations should determine if they can escape UBIT treatment by ascertaining if they fall under these seven classifications.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Cost segregation studies improve investor yields in low-income housing tax credit projects
Article Abstract:
Analysis of the internal rates of return for hypothetical low-income housing projects reveal that depreciation techniques that segregate costs into building, site improvement and personal property components can provide higher internal rates of return. Low-income housing tax credits and tax losses provide the primary benefits to developers since low-income housing projects yield little cash flow. For both nonprofit and for-profit developers, cost segregation methods help to increase the tax losses available.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1997
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Colleges, commerciality, and the unrelated business income tax
Article Abstract:
Colleges and Universities should be careful when structuring corporate sponsorship agreements in light of the unsettled definition of unrelated business income as it applies to such institutions. Though the Tenth Circuit and, to a lesser extent, the IRS have accepted arguments claiming that some types of sponsorship payments constitute royalties and other tax-exempt income, there is no reason to believe this has become official IRS policy.
Publication Name: Taxes: The Tax Magazine
Subject: Business
ISSN: 0040-0181
Year: 1996
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