Unrelated Business Income

Per the IRS, for most organizations, the activity of a tax exempt organization will be taxable as unrelated business income if it meets three requirements:

1. It is a trade or business,
2. It is regularly carried on, and
3. It is not substantially related to furthering the exempt purpose of the organization.

However, the IRS recognizes a number of modifications, exclusions, and exceptions to the general definition of unrelated business income.