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

or call 1-800-926-7926
Program Materials

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.

Description

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.

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Outline

  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

Benefits

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

Faculty

Brenda A. Blunt, CPA, CGMA
Brenda A. Blunt, CPA, CGMA

Tax Partner
Eide Bailly

Ms. Blunt has nearly 30 years of experience providing services to tax-exempt entities, closely-held business and their...  |  Read More

Michael N. Fine
Michael N. Fine

Partner
Wyatt Tarrant & Combs

Mr. Fine's practice spans the full range of nonprofit and tax-exempt organization legal issues, advising...  |  Read More

Frank H. Smith, CPA
Frank H. Smith, CPA

Partner
Raffa

Mr. Smith has more than 20 years of experience working with tax-exempt organizations and is considered a subject matter...  |  Read More

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$147