Income derived from for-profit activities in a nonprofit corporation is subject to ____.

Question

Income derived from for-profit activities in a nonprofit corporation is subject to ____. ​

Quizplus · Accepted Answer

Income derived from for-profit activities within a nonprofit corporation is subject to income taxation. This is because while nonprofits enjoy tax-exempt status for their charitable, educational, or religious activities, income generated from activities unrelated to their tax-exempt purpose is taxable under U.S. tax law, specifically under the Unrelated Business Income Tax (UBIT).

Income Derived from For-Profit Activities in a Nonprofit Corporation Is