IRS Provides Interim Rules for Calculating Unrelated Business Income Tax

Section 512(a)(6) of the Tax Cuts and Jobs Act requires nonprofit organizations to calculate unrelated business taxable income (UBTI) separately with respect to “each trade or business.” Since the tax reform bill was signed into law late last year, much uncertainty has arisen as to what constitutes a separate trade or business activity, sometimes referred to as “silos.”

To help answer these questions, the IRS has issued Notice 2018-67 which offers interim rules for calculating UBTI with respect to aggregating gross income and directly connected deductions of certain activities.

To read more on the key take-aways from the IRS notice, read this summary from Wagenmaker & Oberly.