An activity is not an unrelated trade or business for purposes of the unrelated business income tax (UBIT) unless it is profitable.

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Profitability is not a determining factor for whether an activity is an unrelated trade or business for purposes of UBIT. The IRS considers various factors such as whether the activity is regularly carried on, whether it is related to the organization's exempt purpose, and whether it is conducted for the production of income. If an activity meets all the criteria, it may be subject to UBIT regardless of whether it is profitable.

An Activity Is Not an Unrelated Trade or Business for Purposes