A nonprofit corporation may incur a federal income tax if it has unrelated business income.

Question

Quizplus · Accepted Answer

Nonprofit corporations are exempt from federal income taxes as long as they operate exclusively for charitable, religious, educational, scientific, or other similar purposes. However, if a nonprofit corporation engages in any trade or business activity that is not related to its exempt purpose, it may be subject to federal income tax on that "unrelated business income."

A Nonprofit Corporation May Incur a Federal Income Tax If