The Law of Tax-Exempt Organizations + Website, 2017 Cumulative Supplement, 11th Edition

CHAPTER TWENTY-FOUR

Unrelated Business: Basic Rules

1. *§ 24.1 Introduction to Unrelated ­Business Rules
2. *§ 24.2 Definition of Trade or Business
3. *§ 24.3 Definition of Regularly Carried On
4. § 24.5 Contemporary Applications of Unrelated Business Rules
5. *§ 24.9 Unrelated Debt-Financed Income
6. *§ 24.10 Tax Structure
7. *§ 24.11 Deduction Rules

*§ 24.1 INTRODUCTION TO UNRELATED BUSINESS RULES

*p. 687, second complete paragraph, third line. Insert footnote following period:

^11.1 See § 4.5(c).

*p. 689, note 29. Insert following existing text:

Thus, the IRS ruled that income to be received by a private foundation on satisfaction of debts of legal fees earned by its founder, now deceased, will not be unrelated business income because the foundation will only be a passive recipient of the income; the unrelated business that was regularly carried on to generate the fees was conducted by the founder's law firm, not the foundation (Priv. Ltr. Rul. 201626004).

*§ 24.2 DEFINITION OF TRADE OR BUSINESS

*(b) Requirement of Profit Motive

*p. 691, second complete paragraph, first line. Insert footnote following first sentence:

^52.1 The instructions accompanying Form 990-T (see § 28.10) state: “Generally, an activity lacking a profit motive is one that is not conducted for the purpose of producing a profit or one that has consistently produced losses when both direct and indirect expenses are taken into account.”

*p. 692, note 56. Insert as first sentence:

A similar arrangement involved a religious ...