- 10 -
(A) General rule.–-In the case of an organi-
zation described in paragraph (7), (9), (17), or
(20) of section 501(c), the term “unrelated busi-
ness taxable income” means the gross income (ex-
cluding any exempt function income), less the
deductions allowed by this chapter which are di-
rectly connected with the production of the gross
income (excluding exempt function income) * * *.
(B) Exempt function income.–-For purposes of
subparagraph (A), the term “exempt function in-
come” means the gross income from dues, fees,
charges, or similar amounts paid by members of the
organization as consideration for providing such
members or their dependents or guests goods, fa-
cilities, or services in furtherance of the pur-
poses constituting the basis for the exemption of
the organization to which such income is paid.
Such term also means all income (other than an
amount equal to the gross income derived from any
unrelated trade or business regularly carried on
by such organization computed as if the organiza-
tion were subject to paragraph (1)), which is set
aside—-
(i) for a purpose specified in section
170(c)(4), or
(ii) in the case of an organization
described in paragraph (9) * * * of section
501(c), to provide for the payment of life,
sick, accident, or other benefits,
including reasonable costs of administration di-
rectly connected with a purpose described in
clause (i) or (ii). If during the taxable year,
an amount which is attributable to income so set
aside is used for a purpose other than that de-
scribed in clause (i) or (ii), such amount shall
be included, under subparagraph (A), in unrelated
business taxable income for the taxable year.
* * * * * * *
(E) Limitation on amount of setaside in the
case of organizations described in paragraph (9)
* * * of section 501(c).--
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011