Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition 2019 Cumulative Supplement, 5th Edition

CHAPTER 21Unrelated Business Income

1. § 21.1  IRS Scrutiny of Unrelated Business Income
2. § 21.4  Definition of Trade or Business
   1. *(b) Commerciality Test
3. § 21.5  What Is Unrelated Business Income?
   1. (b) Commerciality Test
4. § 21.7  “Substantially Related”
   1. *(a) Examples of Related Activities
   2. *(b) Sales of Goods or Merchandise
   3. (c) School Athletics and Entertainment Events
5. § 21.8  Unrelated Activities
   1. *(b) Services
   2. (e) Sponsorships
   3. (g) Real Estate
   4. (i) Exclusive Marketing Agreements/Covenants Not to Compete
6. § 21.10 Income Modifications
   1. (a) Dividends and Interest
   2. (c) Rentals
7. *§ 21.11 Calculating and Minimizing Taxable Income
8. § 21.12 Debt‐Financed Property
   1. (a) Properties Not Subject to Debt‐Financed Rules
   2. (b) Other Types of Debt
   3. (e) Proposed Regulations
9. § 21.13 Museums
   1. (a) Identifying Related and Unrelated Objects
10. § 21.15 Publishing
    1. (c) Circulation Income

§ 21.1 IRS Scrutiny of Unrelated Business Income

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The IRS 2012 Annual Report and FY 2013 Work Plan announced they will continue exams for organizations that report unrelated business income and fail to file Form 990‐T. The IRS also said it planned to analyze Form 990‐T data to develop risk models that will help the division identify organizations that report “significant gross receipts” from unrelated business activities but do not declare any tax due. This effort will be used in connection with a “coming UBIT project.”¹ The July 2015 Update on their Priority Guidance plan made no mention of the ...