Chapter 4
Unrelated Business Taxable Income

The term "unrelated business taxable income" generally means the gross income derived from any unrelated trade or business regularly carried on by the exempt organization, less the deductions directly connected with carrying on the trade or business. If an organization regularly carries on two or more unrelated business activities, its unrelated business taxable income is the total of gross income from all such activities less the total allowable deductions attributable to all the activities.

In computing unrelated business taxable income, gross income and deductions are subject to the modifications and special rules explained in this chapter. Whether a particular item of income or expense falls within any of these modifications or special rules must be determined by all the facts and circumstances in each specific case. For example, if the organization received a payment termed rent that is in fact a return of profits by a person operating the property for the benefit of the organization, or that is a share of the profits retained by the organization as a partner or joint venturer, the payment is not within the income exclusion for rents, discussed later under Exclusions.

Income

Deductions

Partnership Income or Loss

S Corporation Income or Loss

Special Rules for Foreign Organizations

Special Rules for Social Clubs, VEBAs and SUBs

Special Rules for Veterans' Organizations

Income From Controlled Organizations

Income From Debt-Financed Property

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