Learn applicable rules for calculating unrelated business taxable income.
Organizations that are recognized by the IRS as tax-exempt are generally not subject to income tax on their activities. However, the IRS imposes what is called unrelated business income tax on certain activities. Unrelated business income tax is not fatal to an organization’s tax-exempt status (and it sometimes makes sense to incur the tax), but a tax-exempt organization should be aware of what it is, how to avoid it, and what the potential consequences are. This presentation will help practitioners identify activities that may cause unrelated business income tax, determine whether any exceptions or modifications apply, and evaluate the risk associated with conducting unrelated trade or business activities. The presentation will also provide information about the applicable rules for calculating unrelated business taxable income.
Learning Objectives
- You will be able to define unrelated business taxable income.
- You will be able to discuss the exceptions to unrelated trade or business, and what type of income is generally not considered unrelated business taxable income.
- You will be able to explain debt-financed income rules and why they matter for a tax-exempt organization.
- You will be able to identify activities that may generate unrelated business taxable income.
Agenda
- Does the Activity Constitute an Unrelated Trade or Business?
- If the Activity Constitutes an Unrelated Trade or Business, Do Modifications or Exceptions Apply?
- Do Unrelated Debt-Financed Rules Apply?
- How Does an Organization Compute and Report Unrelated Business Taxable Income?
- Risks of Incurring Unrelated Business Taxable Income
Speakers
Jason J. Kohout,
Foley & Lardner LLP- Associate, Foley & Lardner, LLP, practices in tax-exempt and political law areas
- Co-writer, “Bellco Credit Union Decision Extends Tax-Exempt Royalty Treatment to Income from Insurance Sales,” Taxation of Exempts, Sept./Oct. 2011 Issue
- Co-writer, Tax Chapter, Guide to Wisconsin Nonprofit Law, Wisconsin Bar Association Deskbook
- Assists with the representation of a large membership organization and several healthcare organizations with specific concerns relating to unrelated business income tax
- Co-developed Foley Charitable Academy, a series of presentations to prepare professionals for board service and involvement with nonprofits as pro bono advisors
- J.D. degree, Harvard Law School; A.B. degree, Harvard College
Richard F. Riley, Jr.,
Foley & Lardner LLP- Tax partner in the Washington, D.C. office of Foley & Lardner, LLP
- Primarily focuses on exempt organization tax law
- Worked extensively with section 501(c)(3) charities including publicly supported organizations and private foundations, health care organizations, social welfare organizations, fraternal beneficiary societies, and numerous other organizations, in transactional planning projects, disputes and ruling projects with the Internal Revenue Service, and tax litigation
- Represents major national tax-exempt industry in reviewing the tax consequences of a range of financial and insurance products, negotiating with the IRS on unrelated business tax issues, and representing the industry in successful test-case litigation in two federal courts
- Provides corporate and tax advice to many tax-exempt political campaign committees, PAC’s, and advocacy groups
- Member of the Section of Taxation of the American Bar Association, where he currently serves as co-chair of the Non-501(c)(3) Subcommittee of the Exempt Organizations Committee
- J.D. degree, with honors, Duke University School of Law; graduate, magna cum laude, Yale University
Emmaline S. Jurgena,
Foley & Lardner LLP- Associate, Foley & Lardner, LLP, practices in estate and tax planning
- Co-Chair, Milwaukee Association for Women Lawyers
- Assists with initial formation, ongoing administration, tax counseling and tax return preparation, assistance with IRS audits, and litigation for a wide variety of tax-exempt organizations including colleges and universities, hospital systems, religious organizations, museums, private foundations, social welfare organizations, and other tax-exempt and nonprofit organizations
- Assisted with transfer and tax planning for $24 million dollar bequest to large charity involving an innovative tax structure with multiple partnerships and redemptions
- J.D. degree, University of Chicago Law School; B.A. degree, summa cum laude, Marquette University
Who Should Attend
This live webinar is designed for accountants, CPAs, executive directors, officers, controllers, CFOs, finance directors, tax managers, enrolled agents, and tax preparers.
