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termination agreement was not derived from a trade or business
and, therefore, does not constitute UBTI.
For similar reasons, we do not think that the nonsponsorship
and noncompetition clause met the second requirement for UBTI--
that the trade or business be “regularly carried on” by the
organization. The regulations provide guidance in deciding
whether an activity is regularly carried on within the meaning of
section 512:
regard must be had to the frequency and continuity with
which the activities productive of the income are
conducted and the manner in which they are pursued.
This requirement must be applied in light of the
purpose of the unrelated business income tax to place
exempt organization business activities upon the same
tax basis as the nonexempt business endeavors with
which they compete. * * *
* * * * * * *
Certain intermittent income producing activities occur
so infrequently that neither their recurrence nor the
manner of their conduct will cause them to be regarded
as trade or business regularly carried on. For
example, income producing or fund raising activities
lasting only a short period of time will not ordinarily
be treated as regularly carried on if they recur only
occasionally or sporadically. * * * [Sec. 1.513-
1(c)(1), (2)(iii), Income Tax Regs.; emphasis added.]
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