- 6 - (A) Organizations described in sections 401(a) and 501(c).--The tax imposed by paragraph (1) shall apply in the case of any organization (other than a trust described in subsection (b) or an organization described in section 501(c)(1)) which is exempt, except as provided in this part or part II (relating to private foundations), from taxation under this subtitle by reason of section 501(a). Section 512 defines UBTI as follows: SEC. 512. UNRELATED BUSINESS TAXABLE INCOME. (a) Definition.--For purposes of this title-- (1) General rule.--Except as otherwise provided in this subsection, the term “unrelated business taxable income” means the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business, * * *. Section 513 defines the term “unrelated trade or business”. In relevant part, that section provides: SEC. 513. UNRELATED TRADE OR BUSINESS. (a) General Rule.–-The term “unrelated trade or business” means, in the case of any organization subject to the tax imposed by section 511, any trade or business the conduct of which is not substantially related (aside from the need of such organization for income or funds or the use it makes of the profits derived) to the exercise or performance by such organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under section 501 * * *. In summary, sections 511 through 513 require an otherwise tax-exempt organization to pay tax on its UBTI. Sec. 511(a)(1). UBTI is an organization's gross income, less allowablePage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011