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Are Your Benefit Plan’s Alternative Investments Generating Taxes?
Posted by Lisa Burke on Thu, Aug 1, 2019 @ 05:35 PM

Alternative investments offer attractive features for employee benefit plan sponsors. Investments in real estate, businesses, and partnerships tend to yield higher rates of return when compared to traditional investment vehicles like stocks, bonds, and mutual funds. But those alternative investments could also come with tax consequences. Plan sponsors may not be aware that their plan investments are generating unrelated business taxable income (UBTI), which could lead to compliance issues.

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Topics: tax-exempt, not-for-profit, IRS, UBTI, unrelated business taxable income, NFP, nonprofit, UBIT, Lisa Burke

Recent Developments in UBTI for Not-For-Profits
Posted by Lisa Burke on Thu, May 30, 2019 @ 05:46 PM

Not-for-profit organizations have a long-standing debate with regulators about whether revenue generated by certain organizational activities should be taxable. In the 1940s and the 1950s, the IRS noticed that more and more not-for-profits were reporting non-charitable business income alongside their charitable revenues. These organizations were applying their tax exemption to revenues that would otherwise be taxable as corporate business income. There were growing concerns that this created a competitive disadvantage for their for-profit counterparts that were required to pay tax on identical revenue streams.

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Topics: tax-exempt, not-for-profit, IRS, UBTI, unrelated business taxable income, NFP, nonprofit, UBIT, Lisa Burke

Mitigate Your Risk of UBTI
Posted by Joe Giso on Tue, Jan 27, 2015 @ 02:05 PM
 
A recent report from the IRS suggests unrelated business taxable income (UBTI) for tax-exempt organizations will be a key focus of IRS scrutiny as it pursues new government revenues.
 
Not-for-profits earn UBTI from a regularly carried on trade or business that is “not substantially related” to their purpose. Activities qualify as substantially related (and therefore tax-exempt) if a causal relationship exists between the activities generating income and the accomplishment of the entity’s defined mission.
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Topics: not-for-profit, UBTI, Joe Giso

Three Ways to Ensure Your Sponsorship Avoids UBTI
Posted by Richard Scoresby on Tue, May 27, 2014 @ 09:12 AM

Qualified sponsorship payments (QSP) often play a key role in funding not-for-profits and bring mutual benefits to both the not-for-profit organization and the sponsoring company. The not-for-profit receives tax-exempt funding that eases budgetary pressures, and the sponsoring company can demonstrate its commitment to a charitable cause. Not-for-profits should be careful with sponsorship arrangements, however, because if certain precautions are not taken, there can be tax implications.

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Topics: Richard Scoresby, UBTI, unrelated business taxable income

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