Does a Non-Profit 501(c)(3) Realize Unrelated Business Taxable Income (UBTI) For Advertising?

Non-profit organizations which are exempt from income tax under 501(a) are subject to tax on unrelated business income. 501(b), 511. Unrelated business income is gross income derived by any organization from any unrelated trade or business, regularly carried on by it, less the deductions allowed. 512. An unrelated trade or business is a trade or business which is not substantially related (aside from the need of such organization for income or funds) to the purpose of the organization. 513. However, unrelated trade or business does not include a trade or business where substantially all the work is performed for the organization without compensation. 513(a)(1). See Rev. Rul. 75-201, 1975-1 CB 164.

The sale of advertising in a publication published by an exempt organization is an unrelated trade or business when the advertising activity is regularly carried on. Reg. 1.512(a)-1(f)(1). See also Rev. Rul. 73-424, 1973-2 CB 190.

Courts have held advertising revenue not to constitute unrelated business income in some circumstances. For example, in National Collegiate Athletic Assn. V. Comm., (1990, CA10) 66 AFTR 2d 90-5602, 914 F.2d 1417, 90-2USTC 50513, revg (1989) 92 TC 456, advertising revenue received by the ncaa from the sale of programs of its annually sponsored championship tournament was not unrelated business income where the tournament lasted less than three weeks and occurred only once a year.

IRS Chief Counsel strongly disagrees with the Tenth circuit. The IRS argues the state court should have taken into account the time spent soliciting the advertisements and preparing the advertising for publication. IRS announced it will continue to litigate the issue in appropriate cases. action on Decision 1991-015, 7/3/91.

IRS distinguished ncaa where a state university received income from advertising placed in its football souvenir programs. Here, a significant time span was involved over which the activities were conducted. The football season lasted three months and the work in setting up the programs and soliciting adverting took even longer. IRS letter ruling 9137002.

Assuming that the journal is published periodically throughout the year, an exempt organization should not rely on National Collegiate Athletic Assn. The periodic publishing and on going solicitation efforts will likely constitute a unrelated business regularly carried on. See 512.

The court also held advertising revenue does not constitute unrelated business income in US v. american College of Physicians, (1986 S.Ct). In american College of Physicians, the court found that the advertising business contributes importantly to the universitys education program through the training of students.

Also, advertising revenue does not constitute unrelated business income if the advertising contributes to the organizations purpose. For example, publication of legal notices in a bar association journal contributes to the associations exempt purposes by promoting the common interest of the legal profession through providing a single source of information regarding legal events in the county and therefore, wouldnt result in unrelated business income. Rev. Rul. 82-139, 1982-2 CB 108. However, advertising revenue received by a bar association for ads place in its attorney directory are taxable income since the advertising is commercial in nature and represents an effort on the part of advertisers to maximize sales to a certain segment of the public. IRS Letter Ruling 9148054.

Similarly, magazine advertising revenues received by an exempt trucking association did not contribute to the associations exempt purposes where the advertising represented marketing efforts by the advertisers to sell their product. In this case, no systematic effort was made by the organization to advertise products related to the editorial content and no effort was made by the organization to limit advertisements to new products. florida Trucking Assn Inc. (1986) 87 TC 1039.

It is clear that, with a few exceptions, advertising revenues received by a 501(c)(3) exempt organization will often generate unrelated business taxable income (UBTI).

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Take Me Away Indulgence With Pool Spa And Sauna Luxury

Many of us want to be pampered and cared for. We love to get our hair shampooed and massaged when we get a hair cut, and we visit many restaurants just for the experience of being waited on. A pool spa and sauna session can leave you feeling very relaxed and refreshed. More and more ladies in particular, are getting their nails done on a regular basis, and many are adding a pedicure to go with it. Yes, we love to indulge ourselves with wonderful luxuries. We live in a society that is buying bigger homes, and more expensive cars than ever before. This article will talk about the benefits of indulging in a pool spa and sauna treatment.

More and more people are aware of the need to take care of their bodies. A pool spa and sauna session can be a very healthy experience for your body, and although each one is a little different, they have similar characteristics. All three can provide a heated sensation and heat can be very therapeutic to the body. Believe it or not, they all three can provide you with a cardio workout. How you might ask, can sitting in a spa or sauna compare to swimming a lap in a pool. The higher heat created in both the spa and sauna can raise your heart rate, and actually be compared to walking a brisk lap. Don't not do one of these three because it might be a little more effort on your part. Enjoy all the benefits you can receive from a pool spa and sauna session.

Many homes today are being completed with a pool spa and sauna. Why not, you could consider them as having a vacation at your own home year round. How many of us have gone to a hotel or motel and enjoyed the experience of a pool spa and sauna. Many I'm sure. It is probably pretty safe to say, that the motel choice could have been determined, by the amount of luxuries they offered. You can then leave your vacation behind, remembering all the extra pampering you received. Most hotels today offer a pool spa and sauna as one of their features just to lure you to their facility.

Don't be surprised if you find that your local gym has a pool spa and sauna in it as well. In the past, most people couldn't afford such a luxury for their own home, but they have become such a popular item that prices have come down quite a bit and now a pool spa and sauna are more affordable. Who said you couldn't have your cake and eat it too. You can enjoy a take me away experience in the privacy of your own property.

If you need more helpful Sauna information then quickly head over to http://saunasforyou.com where you will find helpful sauna tips, advice and resources to include home saunas, portable saunas and more Pool Spa And Sauna information.

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