Which of the following statements is correct regarding the unrelated business income tax (UBIT)?
A) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization.
B) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization.
C) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year.
D) An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT.
E) None of these statements is correct.

Question

Quizplus · Accepted Answer

The correct statement regarding the unrelated business income tax (UBIT) is that an exempt organization must conduct a trade or business that is not substantially related to its exempt purpose, and this trade or business must be regularly carried on by the organization. This is what makes the income from such activities subject to UBIT.

Which of the Following Statements Is Correct Regarding the Unrelated