The Texas Tax Lawyer
This paper summarizes the unrelated business income tax rules as they apply to tax-exempt charitable organizations described in Section 501(c)(3) of the Code. Since the 1950s, the unrelated business income tax has been imposed on a charity’s net income from a regularly carried on trade or business that is unrelated to the charity’s tax-exempt purposes. Often times, the justification for imposing this tax on a charity’s net income from unrelated business activities is that such activities involve unfair competition with the charity’s for-profit counterparts.
State Bar of Texas
Terri L. Helge,
Nuts and Bolts of Unrelated Business Income Tax,
Tex. Tax Law.
Available at: https://scholarship.law.tamu.edu/facscholar/721