UBTI and UBIT for Exempt Organizations: Mastering Form 990-T

Getting Calculations Right and Avoiding Audit Traps

Recording of a 110-minute CPE webinar with Q&A

Conducted on Wednesday, May 24, 2017
Recorded event now available

This webinar will give nonprofit tax professionals and advisers a deep dive into the rules governing unrelated business income tax (UBIT), which U.S.-based tax-exempt organizations must pay on unrelated business taxable income (UBTI). The webinar will focus on the standards and guidelines for determining whether income is UBTI and thus subject to tax, and will provide a detailed exploration into the calculations and preparation of Form 990-T, Exempt Organization Business Income Tax Return.


A primary concern of tax-exempt organizations is the challenge of navigating the rules on UBTI. Many exempt organizations receive business income and depend on that income to carry on their charitable purpose. However, UBTI generates the need to file an income tax return and can lead to an unexpected tax bill, and excess UBTI can jeopardize a nonprofit organization’s exempt status.

As the nature of nonprofit organizations evolves, and the distinction between exempt and for-profit organizations becomes less certain, tax advisers of nonprofit entities can expect continued scrutiny from the IRS on UBTI. Exempt organizations must carefully review their UBTI calculations to avoid having income or expenses reclassified as taxable by the IRS.

Through proper planning and reporting, exempt organizations may be able to anticipate and mitigate the impact of UBTI. Tax advisers need to know the specifics of tax return treatment of UBTI to assist nonprofit clients in complying with the UBTI regulations.

Listen as our panel of experienced nonprofit tax advisers provides a deep dive into the rules and reporting requirements governing UBTI for exempt organizations.


  1. Unrelated business taxable income overview
  2. Form 990-T filing thresholds
  3. UBTI calculations and schedules
    1. Tax computation
    2. Allocation of expense deductions
    3. Rent income (Schedule C)
    4. Unrelated debt-financed income (Schedule E)
    5. Exploited activities (Schedule I)
    6. Advertising income (Schedule J)
    7. Other schedules
  4. IRS audit “triggers” leading to increases in UBTI


The panel will discuss these and other important topics:

  • Definitions of UBTI and Form 990-T filing thresholds
  • Deductions standards for expenses in UBTI calculations
  • Rental income as UBTI
  • Affinity contracts
  • Advertising activities
  • Alternative investments
  • Unrelated debt-financed income

Learning Objectives

After completing this course, you will be able to:

  • Identify what qualifies as UBTI for an exempt organization
  • Recognize proper computation of allocable expenses directly connected to the operation of the unrelated trade or business
  • Discern preparation errors that lead to reclassification of UBTI and resultant penalties


Brenda A. Blunt, CPA, CGMA, Tax Partner
Eide Bailly, Phoenix

Ms. Blunt has nearly 30 years of experience providing services to tax-exempt entities, closely-held business and their stakeholders. She provides income tax compliance and planning for individuals, corporations, partnerships and tax-exempt entities and represents clients before the IRS and state taxation authorities. Ms. Blunt has significant experience planning for the tax aspects of unrelated business income for non-profits and retirement plans.

Michael N. Fine, Partner
Wyatt Tarrant & Combs, Louisville, Ky.

Mr. Fine's practice spans the full range of nonprofit and tax-exempt organization legal issues, advising public charities, private foundations, boards, and donors. He regularly assists clients with tax compliance and corporate planning matters including executive compensation, intermediate sanctions, joint ventures, affiliation strategies, reorganizations, governance, charitable contributions, captive insurance, and obtaining tax exemption from the IRS. He is a frequent speaker and author, and has written numerous publications including articles on Section 501(r)’s requirements for tax-exempt hospitals and a guide on establishing "Friends of" organizations within the United States.

Frank H. Smith, CPA, Partner
Raffa, Washington, D.C.

Mr. Smith has more than 20 years of experience working with tax-exempt organizations and is considered a subject matter expert in analyzing complex nonprofit transactions. He is also skilled in the nuances of tax accounting and IRS regulations pertaining to private foundations. He manages his firm’s exempt organization tax department, preparing and reviewing annual tax returns and providing tax consultation services related to the day-to-day operations of a variety of tax-exempt organizations. Previously, he was a senior manager in the national tax department of Ernst & Young, where he specialized in analyzing and addressing tax issues related to the nonprofit industry. He worked with an array of tax-exempt organizations nationwide and was responsible for monitoring the regulatory and legislative developments of the nonprofit industry on a daily basis.

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Recorded Event

Includes full event recording plus handouts.

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Customer Reviews

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Accounting Non-Profit Services Advisory Board

Amanda Adams

Tax Partner

Blazek & Vetterling

Bill Allen


Making Auditors Proficient

Steven J. Luber

Senior Manager


Michele A. W. McKinnon



Celia Roady

Tax Partner

Morgan Lewis

Daniel Romano

Partner-In-Charge, National Not-For-Profit Tax Practice

Grant Thornton

Chris Stanz

Principal, Non-Profit and Government Practice


Alan Strand


Strand and Associates

Brian Yacker

Managing Partner

YH Advisors | The Exempt Org Experts

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