Analysis of Unrelated Business Income Tax (UBIT)

Analysis of Unrelated Business Income Ta

Analysis of Unrelated Business Income Tax (UBIT)

While most nonprofits are exempt from tax under IRC Section 501(a), they may still owe unrelated business income tax (UBIT), depending on the nature of the activities producing that income. As such, it is very important for nonprofits to distinguish between their tax-exempt purposes and their business activities.

Blackman & Sloop’s nonprofit advisors are fully versed in the complexities of UBIT and are prepared to perform the analysis necessary to ensure your organization’s compliance. We will also help you file the required paperwork to preserve your tax-exempt status. 

Some common transactions that may trigger UBIT include:

  • Rental Income
  • Advertising vs. Sponsorship Income
  • Fringe Benefits
  • Executive Compensation
  • Employee Fringe Benefits including Transportation and Parking Benefits