The general objective of the tax on unrelated business income is to tax such income as if the entity were a taxable corporation.

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The general objective of the tax on unrelated business income is to tax such income as if the entity were a taxable corporation. This tax is known as UBIT (Unrelated Business Income Tax) and it applies to tax-exempt organizations such as nonprofits and charities when they engage in unrelated business activities that generate income. The purpose of this tax is to ensure that tax-exempt organizations do not have an unfair advantage over for-profit businesses that are subject to corporate income tax. Therefore, the income generated from unrelated business activities is subject to UBIT, which is calculated based on the organization's net income from such activities.

The General Objective of the Tax on Unrelated Business Income