May 15, 2013
Authored by: Keith Kehrer
Tax-exempt organizations have not been immune from the impact of the economic downturn that began in 2008. In response to flat or declining donation income, many organizations have sought to generate revenue through activities that could be considered commercial in nature. While engaging in commercial-type activities may be a viable alternative in many situations, tax-exempt organizations should recognize that such activities may give rise to unrelated business taxable income, or UBTI and may even call into question their tax-exempt status. Moreover, the lines between related and unrelated activities are not always clear. The attached article summarizes these issues.