Theater, Inc., an exempt organization, owns a printing company, Printers, Inc., that remits 85% of its profits i.e., taxable income of $100,000) to Theater. Since Printers remits at least 85% of its profits to Theater, neither Theater, nor Printers, must pay income tax on this $85,000 $100,000 × 85%).

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The income from Printers, Inc. would be considered unrelated business income for Theater, Inc., and thus subject to unrelated business income tax (UBIT), despite the profit being remitted to an exempt organization. The ownership of a business that is unrelated to the exempt purpose of the organization generates taxable income, regardless of the percentage of profits remitted.