Which of the following statements is/are correct with respect to the unrelated business income tax (UBIT)?
A)The UBIT does not apply if the business is staffed by volunteers.
B)The UBIT does not apply if all of the products sold by the business are donated.
C)The UBIT does not apply if the gross profit margin is not greater than the highest corporate tax rate.
D)Only a.and b.are correct.
E)a., b., and c.are all correct.

Question

Quizplus · Accepted Answer

Option A and B are correct. The UBIT does not apply if the business is staffed by volunteers or if all of the products sold by the business are donated.

Option C is incorrect. The UBIT applies regardless of the profit margin. The UBIT is calculated based on the gross income derived from unrelated business activities, minus any expenses directly connected with generating that income.

Which of the Following Statements Is/are Correct with Respect to the Unrelated