03/01/2018

Not Following UBIT?

Now is the time to understand how UBI is computed, reported

ASAE and the CPA firm Tate & Tryon recently prepared an article to help tax-exempt organizations understand a provision in the new tax law that requires separate reporting of taxable income from different business activities.

The provision in the Tax Cuts and Jobs Act, the sweeping overhaul of the tax code signed into law at the end of last year, requires that unrelated business taxable income be separately computed for each business activity, ostensibly to prevent tax-exempt groups from using the loss from one unrelated business activity to offset the income from another unrelated business activity.

The IRS, which is preparing guidance about implementing the tax law, recently updated its 2017-2018 Priority Guidance Plan to include this particular issue as a “near-term priority.” Guidance is certainly needed, as the new law does not specify what makes up a separate unrelated trade or business, the article says.

Please select this link to read the complete article from Associations Now.