Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

Question

Quizplus · Accepted Answer

Federal agencies exempt under § 501(c)(1) are not subject to unrelated business income tax (UBIT) because they are considered instrumentalities of the United States and their income is typically not derived from a trade or business unrelated to their exempt purposes.

Federal Agencies Exempt from Federal Income Tax Under § 501(c)(1)