Which of the following statements regarding low-cost articles is correct?
A)The distribution of low-cost articles can be classified as not being an unrelated trade or business.
B)For 2012, a low-cost article is one that costs $9.70 or less.
C)Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income.
D)Only a.and b.are correct.
E)a., b., and c.are correct.

Question

Quizplus · Accepted Answer

Option A is correct - the distribution of low-cost articles can be classified as not being an unrelated trade or business. 
Option B is correct - for 2012, a low-cost article is one that costs $9.70 or less. 
Option C is incorrect - contributions received as the result of the distribution of low-cost articles may be exempt from UBI if they meet certain conditions such as being given with no expectation of a contribution, solely for public relations or goodwill, or if they qualify for the low-cost article exemption.

Which of the Following Statements Regarding Low-Cost Articles Is Correct