Learning & Event Calendar

Hosted by: Pennsylvania Association of Nonprofit Organizations (PANO)
Presented by: Donald W. Kramer, Esq., Editor of Nonprofit Issues, Montgomery, McCracken, Walker & Rhoads, LLP

NDANO members are eligible for the discounted PANO member rate of $50. Log-in to the members-only section of this website for the discount code or contact NDANO at 701-258-9101 or via email.

Financially squeezed nonprofits often seek to generate new revenue through new business ventures. But such efforts can carry serious legal, as well as economic, risks. This webinar will explore the unrelated business income tax (“UBIT”), how to define it, how to avoid it, and how to deal with the consequences of having “too much” of it.

Regularly badgered by Congress to limit “unfair” competition with for-profit businesses, the Internal Revenue Service consistently looks to impose UBIT on unrelated business taxable income at nonprofit organizations, including facility rentals and travel tours at large institutions like colleges and universities, revenue from joint ventures with for-profits, gift shop income from museums, investment income from anyone’s margin account, advertising revenue from small nonprofit organization newsletters, and everything in between.

Nonprofits with substantial unrelated business income will have to pay substantial unrelated business income tax — and could even lose their tax-exempt status.

This session will give tips on structuring activities to avoid the revenue being classified as unrelated business income, allocating expenses to reduce net income, and restructuring to avoid the adverse consequences of “too much” of a winning commercial venture.