Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 3

The Downtown Wellness Clinic, a tax-exempt organization, sells memberships to corporations so that their employees can work out before and after office hours. Three blocks away, the Power Up Fitness Center has similar facilities and also wants to sell memberships to corporate neighbors. Is the clinic subject to federal income tax on its membership sales