UBTI and UBIT for Exempt Organizations: Mastering Form 990-T, Siloing Unrelated Activities, and Avoiding Audit Traps

Note: CLE credit is not offered on this program

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

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Conducted on Tuesday, June 15, 2021

Recorded event now available

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Course Materials

This course will give nonprofit tax professionals and advisers a good look at the rules governing unrelated business income tax. The webinar will focus on guidelines for determining whether income is unrelated business taxable income (UBTI), how separate business lines are determined under the regulations, and 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 navigating the rules on UBTI. Many exempt organizations receive taxable income and depend on that income to carry on their charitable purpose. However, UBTI generates the need to file an income tax return and may lead to an unexpected tax bill. Excess UBTI can even jeopardize the exempt status of a nonprofit organization.

For tax-exempt organizations operating multiple unrelated business activities, the 2017 Tax Act does not allow losses from an unrelated trade or business to offset profit from a separate unrelated trade or business. Final regulations issued in November 2020 explain how to separate unrelated business activities into "silos" using the 2-digit NAICS codes.

Through proper planning and reporting, exempt organizations may anticipate the impact of UBTI.

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. UBTI overview
  2. Form 990-T filing thresholds
  3. Latest guidance on determining separate lines of business activities
  4. 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
  5. IRS audit triggers leading to increases in UBTI

Benefits

The panel will discuss these and other relevant topics:

  • Definition of UBTI and Form 990-T filing thresholds
  • Deduction standards for expenses in UBTI calculations
  • Rental income as UBTI
  • Siloing unrelated business activities
  • Advertising activities
  • Unrelated debt-financed income

Faculty

Trimner, David
David Trimner, CPA, MST
Managing Partner
TrimnerBeckham

Mr. Trimner brings a wide range of experience from more than 20 years in nonprofit tax consulting. He works with...  |  Read More

Steinberg, Andrew
Andrew L. Steinberg
Attorney
Venable

Mr. Steinberg advises nonprofit organizations on their legal matters and sensitive business affairs. Senior management...  |  Read More

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