April 23, 2020
IRS released proposed regulations providing guidance on unrelated business income tax for tax-exempt organizations. REG-106864-18 explains how an exempt organization subject to the unrelated business income tax described in section 511 of the Internal Revenue Code (Code) determines if it has more than one unrelated trade or business, and, if so, how the exempt organization calculates unrelated business taxable income. The proposed regulations also clarify that the definition of “unrelated trade or business” applies to individual retirement accounts. Additionally, the proposed regulations provide that inclusions of subpart F income and global intangible low-taxed income are treated in the same manner as dividends for purposes of section 512.
IRS is accepting written or electronic comments and requests for a public hearing on REG-106864-18 until June 23, 2020 via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG-106864-18). GRF CPAs & Advisors (GRF) is carefully reviewing the guidance and our Nonprofit Tax team will provide updates when more information is available.
Richard J. Locastro, CPA, JD