Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?
A) The business is carried on regularly but sells donated merchandise.
B) Majority of labor is performed by paid employees.
C) The business is carried on regularly but is unrelated to the organization's tax-exempt purpose.
D) The business is operated for a profit.

Question

Quizplus · Accepted Answer

Activities that are carried on regularly but sell donated merchandise are exempt from UBIT under the "convenience exception."

Note: None of the other choices provide conditions that would exempt income-producing activities from UBIT.

Which of the Following Conditions Would Exempt Income-Producing Activities from the Unrelated