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Midnight Basketball,Inc

Question 132

Essay

Midnight Basketball,Inc.,an exempt organization that organizes and conducts basketball games for youths ages 10-13,receives a $20,000 contribution from Brown Shoe Company.Midnight agrees to put Brown's logo on the cover of its monthly newsletter.
a.Is the contribution unrelated business income to Midnight?
b.Assume that instead of putting Brown's logo on the cover of its newsletter, Midnight agrees to include a statement in the newsletter that youth playing in the games conducted by Midnight wear only shoes manufactured by Brown. Is the contribution unrelated business income to Midnight?

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a.No.The $20,000 payment is a qualified ...

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