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How Do I Amend My Tax Return Online

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How Do I Amend My Tax Return Online

How do i amend my tax return online 3. How do i amend my tax return online   Environmental Taxes Table of Contents Oil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax Environmental taxes are imposed on crude oil and petroleum products (oil spill liability), the sale or use of ozone-depleting chemicals (ODCs), and imported products containing or manufactured with ODCs. How do i amend my tax return online In addition, a floor stocks tax is imposed on ODCs held on January 1 by any person (other than the manufacturer or importer of the ODCs) for sale or for use in further manufacture. How do i amend my tax return online Figure the environmental tax on Form 6627. How do i amend my tax return online Enter the tax on the appropriate lines of Form 720 and attach Form 6627 to Form 720. How do i amend my tax return online For environmental tax purposes, United States includes the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, any possession of the United States, the Commonwealth of the Northern Mariana Islands, the Trust Territory of the Pacific Islands, the continental shelf areas (applying the principles of section 638), and foreign trade zones. How do i amend my tax return online No one is exempt from the environmental taxes, including the federal government, state and local governments, Indian tribal governments, and nonprofit educational organizations. How do i amend my tax return online Oil Spill Liability Tax The oil spill liability tax is reported on Form 6627, Environmental Taxes, and Form 720, Quarterly Federal Excise Tax Return (IRS Nos. How do i amend my tax return online 18 and 21). How do i amend my tax return online The oil spill liability tax rate is $. How do i amend my tax return online 08 per barrel and generally applies to crude oil received at a U. How do i amend my tax return online S. How do i amend my tax return online refinery and to petroleum products entered into the United States for consumption, use, or warehousing. How do i amend my tax return online The tax also applies to certain uses and the exportation of domestic crude oil. How do i amend my tax return online Crude oil includes crude oil condensates and natural gasoline. How do i amend my tax return online Petroleum products include crude oil, refined and residual oil, and other liquid hydrocarbon refinery products. How do i amend my tax return online Crude oil. How do i amend my tax return online   Tax is imposed on crude oil when it is received at a United Sates refinery. How do i amend my tax return online The operator of the refinery is liable for the tax. How do i amend my tax return online   Tax is imposed on domestic crude oil used or exported before it is received at a United States refinery. How do i amend my tax return online However, the use of crude oil for extracting oil or natural gas on the premises where such crude oil was produced is not taxable. How do i amend my tax return online The user or exporter is liable for the tax. How do i amend my tax return online Imported petroleum products. How do i amend my tax return online   Tax is imposed on petroleum products when they enter the United States for consumption, use, or warehousing. How do i amend my tax return online The person entering the petroleum product into the country is liable for the tax, including the tax on imported crude oil, even if it is subsequently received at a U. How do i amend my tax return online S. How do i amend my tax return online refinery. How do i amend my tax return online   Tax is imposed only once on any imported petroleum product. How do i amend my tax return online Thus, the operator of a U. How do i amend my tax return online S. How do i amend my tax return online refinery that receives imported crude oil must establish that the petroleum tax has already been imposed on such crude oil in order not to be liable for the tax. How do i amend my tax return online ODCs For a list of the taxable ODCs and tax rates, see the Form 6627 instructions. How do i amend my tax return online Taxable event. How do i amend my tax return online   Tax is imposed on an ODC when it is first used or sold by its manufacturer or importer. How do i amend my tax return online The manufacturer or importer is liable for the tax. How do i amend my tax return online Use of ODCs. How do i amend my tax return online   You use an ODC if you put it into service in a trade or business or for the production of income. How do i amend my tax return online Also, an ODC is used if you use it in the making of an article, including incorporation into the article, chemical transformation, or release into the air. How do i amend my tax return online The loss, destruction, packaging, repackaging, or warehousing of ODCs is not a use of the ODC. How do i amend my tax return online   The creation of a mixture containing an ODC is treated as a taxable use of the ODC contained in the mixture. How do i amend my tax return online An ODC is contained in a mixture only if the chemical identity of the ODC is not changed. How do i amend my tax return online Generally, tax is imposed when the mixture is created and not on its sale or use. How do i amend my tax return online However, you can choose to have the tax imposed on its sale or use by checking the appropriate box on Form 6627. How do i amend my tax return online You can revoke this choice only with IRS consent. How do i amend my tax return online   The creation of a mixture for export or for use as a feedstock is not a taxable use of the ODCs contained in the mixture. How do i amend my tax return online Exceptions. How do i amend my tax return online   The following may be exempt from the tax on ODCs. How do i amend my tax return online Metered-dose inhalers. How do i amend my tax return online Recycled ODCs. How do i amend my tax return online Exported ODCs. How do i amend my tax return online ODCs used as feedstock. How do i amend my tax return online Metered-dose inhalers. How do i amend my tax return online   There is no tax on ODCs used or sold for use as propellants in metered-dose inhalers. How do i amend my tax return online For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. How do i amend my tax return online The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. How do i amend my tax return online 4682-2(d)(5). How do i amend my tax return online The certificate may be included as part of the sales documentation. How do i amend my tax return online Keep the certificate with your records. How do i amend my tax return online Recycled ODCs. How do i amend my tax return online   There is no tax on any ODC diverted or recovered in the United States as part of a recycling process (and not as part of the original manufacturing or production process). How do i amend my tax return online There is no tax on recycled Halon-1301 or recycled Halon-2402 imported from a country that has signed the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol). How do i amend my tax return online   The Montreal Protocol is administered by the United Nations (U. How do i amend my tax return online N. How do i amend my tax return online ). How do i amend my tax return online To determine if a country has signed the Montreal Protocol, contact the U. How do i amend my tax return online N. How do i amend my tax return online The website is untreaty. How do i amend my tax return online un. How do i amend my tax return online org. How do i amend my tax return online Exported ODCs. How do i amend my tax return online   Generally, there is no tax on ODCs sold for export if certain requirements are met. How do i amend my tax return online For a sale to be nontaxable, you and the purchaser must be registered. How do i amend my tax return online See Form 637, Application for Registration (for Certain Excise Tax Activities). How do i amend my tax return online Also, you must obtain from the purchaser an exemption certificate that you rely on in good faith. How do i amend my tax return online Keep the certificate with your records. How do i amend my tax return online The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. How do i amend my tax return online 4682-5(d)(3). How do i amend my tax return online The tax benefit of this exemption is limited. How do i amend my tax return online For more information, see Regulations section 52. How do i amend my tax return online 4682-5. How do i amend my tax return online ODCs used as feedstock. How do i amend my tax return online   There is no tax on ODCs sold for use or used as a feedstock. How do i amend my tax return online An ODC is used as a feedstock only if the ODC is entirely consumed in the manufacture of another chemical. How do i amend my tax return online The transformation of an ODC into one or more new compounds qualifies as use as a feedstock, but use of an ODC in a mixture does not qualify. How do i amend my tax return online   For a sale to be nontaxable, you must obtain from the purchaser an exemption certificate that you rely on in good faith. How do i amend my tax return online The certificate must be in substantially the form as the sample certificate set forth in Regulations section 52. How do i amend my tax return online 4682-2(d)(2). How do i amend my tax return online Keep the certificate with your records. How do i amend my tax return online Credits or refunds. How do i amend my tax return online   A credit or refund (without interest) of tax paid on ODCs may be claimed if a taxed ODC is: Used as a propellant in a metered-dose inhaler (the person who used the ODC as a propellant may file a claim), Exported (the manufacturer may file a claim), or Used as a feedstock (the person who used the ODC may file a claim). How do i amend my tax return online For information on how to file for credits or refunds, see the Instructions for Form 720 or Schedule 6 (Form 8849). How do i amend my tax return online Conditions to allowance for ODCs exported. How do i amend my tax return online   To claim a credit or refund for ODCs that are exported, you must have repaid or agreed to repay the tax to the exporter, or obtained the exporter's written consent to allowance of the credit or refund. How do i amend my tax return online You must also have the evidence required by the EPA as proof that the ODCs were exported. How do i amend my tax return online Imported Taxable Products An imported product containing or manufactured with ODCs is subject to tax if it is entered into the United States for consumption, use, or warehousing and is listed in the Imported Products Table. How do i amend my tax return online The Imported Products Table is listed in Regulations section 52. How do i amend my tax return online 4682-3(f)(6). How do i amend my tax return online The tax is based on the weight of the ODCs used in the manufacture of the product. How do i amend my tax return online Use the following methods to figure the ODC weight. How do i amend my tax return online The actual (exact) weight of each ODC used as a material in manufacturing the product. How do i amend my tax return online If the actual weight cannot be determined, the ODC weight listed for the product in the Imported Products Table. How do i amend my tax return online However, if you cannot determine the actual weight and the table does not list an ODC weight for the product, the rate of tax is 1% of the entry value of the product. How do i amend my tax return online Taxable event. How do i amend my tax return online   Tax is imposed on an imported taxable product when the product is first sold or used by its importer. How do i amend my tax return online The importer is liable for the tax. How do i amend my tax return online Use of imported products. How do i amend my tax return online   You use an imported product if you put it into service in a trade or business or for the production of income or use it in the making of an article, including incorporation into the article. How do i amend my tax return online The loss, destruction, packaging, repackaging, warehousing, or repair of an imported product is not a use of that product. How do i amend my tax return online Entry as use. How do i amend my tax return online   The importer may choose to treat the entry of a product into the United States as the use of the product. How do i amend my tax return online Tax is imposed on the date of entry instead of when the product is sold or used. How do i amend my tax return online The choice applies to all imported taxable products that you own and have not used when you make the choice and all later entries. How do i amend my tax return online Make the choice by checking the box in Part II of Form 6627. How do i amend my tax return online The choice is effective as of the beginning of the calendar quarter to which the Form 6627 applies. How do i amend my tax return online You can revoke this choice only with IRS consent. How do i amend my tax return online Sale of article incorporating imported product. How do i amend my tax return online   The importer may treat the sale of an article manufactured or assembled in the United States as the first sale or use of an imported taxable product incorporated in that article if both the following apply. How do i amend my tax return online The importer has consistently treated the sale of similar items as the first sale or use of similar taxable imported products. How do i amend my tax return online The importer has not chosen to treat entry into the United States as use of the product. How do i amend my tax return online Imported products table. How do i amend my tax return online   The table lists all the products that are subject to the tax on imported taxable products and specifies the ODC weight (discussed later) of each product. How do i amend my tax return online   Each listing in the table identifies a product by name and includes only products that are described by that name. How do i amend my tax return online Most listings identify a product by both name and Harmonized Tariff Schedule (HTS) heading. How do i amend my tax return online In those cases, a product is included in that listing only if the product is described by that name and the rate of duty on the product is determined by reference to that HTS heading. How do i amend my tax return online A product is included in the listing even if it is manufactured with or contains a different ODC than the one specified in the table. How do i amend my tax return online   Part II of the table lists electronic items that are not included within any other list in the table. How do i amend my tax return online An imported product is included in this list only if the product meets one of the following tests. How do i amend my tax return online It is an electronic component whose operation involves the use of nonmechanical amplification or switching devices such as tubes, transistors, and integrated circuits. How do i amend my tax return online It contains components described in (1), which account for more than 15% of the cost of the product. How do i amend my tax return online   These components do not include passive electrical devices, such as resistors and capacitors. How do i amend my tax return online Items such as screws, nuts, bolts, plastic parts, and similar specially fabricated parts that may be used to construct an electronic item are not themselves included in the listing for electronic items. How do i amend my tax return online Rules for listing products. How do i amend my tax return online   Products are listed in the table according to the following rules. How do i amend my tax return online A product is listed in Part I of the table if it is a mixture containing ODCs. How do i amend my tax return online A product is listed in Part II of the table if the Commissioner has determined that the ODCs used as materials in the manufacture of the product under the predominant method are used for purposes of refrigeration or air conditioning, creating an aerosol or foam, or manufacturing electronic components. How do i amend my tax return online A product is listed in Part III of the table if the Commissioner has determined that the product meets both the following tests. How do i amend my tax return online It is not an imported taxable product. How do i amend my tax return online It would otherwise be included within a list in Part II of the table. How do i amend my tax return online   For example, floppy disk drive units are listed in Part III because they are not imported taxable products and would have been included in the Part II list for electronic items not specifically identified, but for their listing in Part III. How do i amend my tax return online ODC weight. How do i amend my tax return online   The Table ODC weight of a product is the weight, determined by the Commissioner, of the ODCs used as materials in the manufacture of the product under the predominant method of manufacturing. How do i amend my tax return online The ODC weight is listed in Part II in pounds per single unit of product unless otherwise specified. How do i amend my tax return online Modifying the table. How do i amend my tax return online   A manufacturer or importer of a product may request the IRS add a product and its ODC weight to the table. How do i amend my tax return online They also may request the IRS remove a product from the table, or change or specify the ODC weight of a product. How do i amend my tax return online To request a modification, see Regulations section 52. How do i amend my tax return online 4682-3(g) for the mailing address and information that must be included in the request. How do i amend my tax return online Floor Stocks Tax Tax is imposed on any ODC held (other than by the manufacturer or importer of the ODC) on January 1 for sale or use in further manufacturing. How do i amend my tax return online The person holding title (as determined under local law) to the ODC is liable for the tax, whether or not delivery has been made. How do i amend my tax return online These chemicals are taxable without regard to the type or size of storage container in which the ODCs are held. How do i amend my tax return online The tax may apply to an ODC whether it is in a 14-ounce can or a 30-pound tank. How do i amend my tax return online You are liable for the floor stocks tax if you hold any of the following on January 1. How do i amend my tax return online At least 400 pounds of ODCs other than halons or methyl chloroform, At least 50 pounds of halons, or At least 1,000 pounds of methyl chloroform. How do i amend my tax return online If you are liable for the tax, prepare an inventory on January 1 of the taxable ODCs held on that date for sale or for use in further manufacturing. How do i amend my tax return online You must pay this floor stocks tax by June 30 of each year. How do i amend my tax return online Report the tax on Form 6627 and Part II of Form 720 for the second calendar quarter. How do i amend my tax return online For the tax rates, see the Form 6627 instructions. How do i amend my tax return online ODCs not subject to floor stocks tax. How do i amend my tax return online   The floor stocks tax is not imposed on any of the following ODCs. How do i amend my tax return online ODCs mixed with other ingredients that contribute to achieving the purpose for which the mixture will be used, unless the mixture contains only ODCs and one or more stabilizers. How do i amend my tax return online ODCs contained in a manufactured article in which the ODCs will be used for their intended purpose without being released from the article. How do i amend my tax return online ODCs that have been reclaimed or recycled. How do i amend my tax return online ODCs sold in a qualifying sale for: Use as a feedstock, Export, or Use as a propellant in a metered-dose inhaler. How do i amend my tax return online Prev  Up  Next   Home   More Online Publications
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How do i amend my tax return online 3. How do i amend my tax return online   Unrelated Trade or Business Table of Contents Selling of products of exempt functions. How do i amend my tax return online Dual use of assets or facilities. How do i amend my tax return online Exploitation of exempt functions. How do i amend my tax return online ExamplesExceptions. How do i amend my tax return online Excluded Trade or Business ActivitiesQualified sponsorship payment. How do i amend my tax return online Advertising. How do i amend my tax return online Exception for contingent payments. How do i amend my tax return online Exception for periodicals. How do i amend my tax return online Exception for conventions and trade shows. How do i amend my tax return online Legal definition. How do i amend my tax return online Legal where played. How do i amend my tax return online No for-profit games where played. How do i amend my tax return online Unrelated business income. How do i amend my tax return online   Unrelated business income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. How do i amend my tax return online   Certain trade or business activities are not treated as an unrelated trade or business. How do i amend my tax return online See Excluded Trade or Business Activities, later. How do i amend my tax return online Trade or business. How do i amend my tax return online   The term “trade or business” generally includes any activity conducted for the production of income from selling goods or performing services. How do i amend my tax return online An activity does not lose its identity as a trade or business merely because it is conducted within a larger group of similar activities that may or may not be related to the exempt purposes of the organization. How do i amend my tax return online   For example, the regular sale of pharmaceutical supplies to the general public by a hospital pharmacy does not lose its identity as a trade or business, even though the pharmacy also furnishes supplies to the hospital and patients of the hospital in accordance with its exempt purpose. How do i amend my tax return online Similarly, soliciting, selling, and publishing commercial advertising is a trade or business even though the advertising is published in an exempt organization's periodical that contains editorial matter related to the organization's exempt purpose. How do i amend my tax return online Regularly conducted. How do i amend my tax return online   Business activities of an exempt organization ordinarily are considered regularly conducted if they show a frequency and continuity, and are pursued in a manner similar to comparable commercial activities of nonexempt organizations. How do i amend my tax return online   For example, a hospital auxiliary's operation of a sandwich stand for 2 weeks at a state fair would not be the regular conduct of a trade or business. How do i amend my tax return online The stand would not compete with similar facilities that a nonexempt organization would ordinarily operate year-round. How do i amend my tax return online However, operating a commercial parking lot every Saturday, year-round, would be the regular conduct of a trade or business. How do i amend my tax return online Not substantially related. How do i amend my tax return online    A business activity is not substantially related to an organization's exempt purpose if it does not contribute importantly to accomplishing that purpose (other than through the production of funds). How do i amend my tax return online Whether an activity contributes importantly depends in each case on the facts involved. How do i amend my tax return online   In determining whether activities contribute importantly to the accomplishment of an exempt purpose, the size and extent of the activities involved must be considered in relation to the nature and extent of the exempt function that they intend to serve. How do i amend my tax return online For example, to the extent an activity is conducted on a scale larger than is reasonably necessary to perform an exempt purpose, it does not contribute importantly to the accomplishment of the exempt purpose. How do i amend my tax return online The part of the activity that is more than needed to accomplish the exempt purpose is an unrelated trade or business. How do i amend my tax return online   Also in determining whether activities contribute importantly to the accomplishment of an exempt purpose, the following principles apply. How do i amend my tax return online Selling of products of exempt functions. How do i amend my tax return online   Ordinarily, selling products that result from the performance of exempt functions is not an unrelated trade or business if the product is sold in substantially the same state it is in when the exempt functions are completed. How do i amend my tax return online Thus, for an exempt organization engaged in rehabilitating handicapped persons (its exempt function), selling articles made by these persons as part of their rehabilitation training is not an unrelated trade or business. How do i amend my tax return online   However, if a completed product resulting from an exempt function is used or exploited in further business activity beyond what is reasonably appropriate or necessary to dispose of it as is, the activity is an unrelated trade or business. How do i amend my tax return online For example, if an exempt organization maintains an experimental dairy herd for scientific purposes, the sale of milk and cream produced in the ordinary course of operation of the project is not an unrelated trade or business. How do i amend my tax return online But if the organization uses the milk and cream in the further manufacture of food items such as ice cream, pastries, etc. How do i amend my tax return online , the sale of these products is an unrelated trade or business unless the manufacturing activities themselves contribute importantly to the accomplishment of an exempt purpose of the organization. How do i amend my tax return online Dual use of assets or facilities. How do i amend my tax return online   If an asset or facility necessary to the conduct of exempt functions is also used in commercial activities, its use for exempt functions does not, by itself, make the commercial activities a related trade or business. How do i amend my tax return online The test, as discussed earlier, is whether the activities contribute importantly to the accomplishment of exempt purposes. How do i amend my tax return online   For example, a museum has a theater auditorium designed for showing educational films in connection with its program of public education in the arts and sciences. How do i amend my tax return online The theater is a principal feature of the museum and operates continuously while the museum is open to the public. How do i amend my tax return online If the organization also operates the theater as a motion picture theater for the public when the museum is closed, the activity is an unrelated trade or business. How do i amend my tax return online   For information on allocating expenses for the dual use of assets or facilities, see Deductions in chapter 4. How do i amend my tax return online Exploitation of exempt functions. How do i amend my tax return online   Exempt activities sometimes create goodwill or other intangibles that can be exploited in a commercial way. How do i amend my tax return online When an organization exploits such an intangible in commercial activities, the fact that the income depends in part upon an exempt function of the organization does not make the commercial activities a related trade or business. How do i amend my tax return online Unless the commercial exploitation contributes importantly to the accomplishment of the exempt purpose, the commercial activities are an unrelated trade or business. How do i amend my tax return online   For the treatment of expenses attributable to the exploitation of exempt activities, see Deductions in chapter 4. How do i amend my tax return online Examples The following are examples of activities that were determined to be (or not to be) unrelated trades or businesses using the definitions and principles just discussed. How do i amend my tax return online Sales commissions. How do i amend my tax return online   An agricultural organization, whose exempt purposes are to promote better conditions for cattle breeders and to improve the breed generally, engages in an unrelated trade or business when it regularly sells cattle for its members on a commission basis. How do i amend my tax return online Artists' facilities. How do i amend my tax return online   An organization whose exempt purpose is to stimulate and foster public interest in the fine arts by promoting art exhibits, sponsoring cultural events, and furnishing information about fine arts leases studio apartments to artist tenants and operates a dining hall primarily for these tenants. How do i amend my tax return online These two activities do not contribute importantly to accomplishing the organization's exempt purpose. How do i amend my tax return online Therefore, they are unrelated trades or businesses. How do i amend my tax return online Membership list sales. How do i amend my tax return online   An exempt educational organization regularly sells membership mailing lists to business firms. How do i amend my tax return online This activity does not contribute importantly to the accomplishment of the organization's exempt purpose and therefore is an unrelated trade or business. How do i amend my tax return online Also see Exchange or rental of member lists under Excluded Trade or Business Activities, later. How do i amend my tax return online Hospital facilities. How do i amend my tax return online   An exempt hospital leases its adjacent office building and furnishes certain office services to a hospital-based medical group for a fee. How do i amend my tax return online The group provides all diagnostic and therapeutic procedures to the hospital's patients and operates the hospital's emergency room on a 24-hour basis. How do i amend my tax return online The leasing activity is substantially related to the hospital's exempt purpose and is not an unrelated trade or business. How do i amend my tax return online   The hospital also operates a gift shop patronized by patients, visitors making purchases for patients, and employees; a cafeteria and coffee shop primarily for employees and medical staff; and a parking lot for patients and visitors only. How do i amend my tax return online These activities are also substantially related to the hospital's exempt purpose and do not constitute unrelated trades or businesses. How do i amend my tax return online Book publishing. How do i amend my tax return online   An exempt organization engages primarily in activities that further its exempt purposes. How do i amend my tax return online It also owns the publication rights to a book that does not relate to any of its exempt purposes. How do i amend my tax return online The organization exploits the book in a commercial manner by arranging for printing, distribution, publicity, and advertising in connection with the sale of the book. How do i amend my tax return online These activities constitute a trade or business regularly conducted. How do i amend my tax return online Because exploiting the book is unrelated to the organization's exempt purposes (except for the use of the book's profits), the income is unrelated business income. How do i amend my tax return online   However, if the organization transfers publication rights to a commercial publisher in return for royalties, the royalty income received will not be unrelated business income. How do i amend my tax return online See Royalties under Exclusions in chapter 4. How do i amend my tax return online School handicraft shop. How do i amend my tax return online   An exempt vocational school operates a handicraft shop that sells articles made by students in their regular courses of instruction. How do i amend my tax return online The students are paid a percentage of the sales price. How do i amend my tax return online In addition, the shop sells products made by local residents who make articles at home according to the shop's specifications. How do i amend my tax return online The shop manager periodically inspects the articles during their manufacture to ensure that they meet desired standards of style and quality. How do i amend my tax return online Although many local participants are former students of the school, any qualified person may participate in the program. How do i amend my tax return online The sale of articles made by students does not constitute an unrelated trade or business, but the sale of products made by local residents is an unrelated trade or business and is subject to unrelated business income tax. How do i amend my tax return online School facilities. How do i amend my tax return online   An exempt school has tennis courts and dressing rooms that it uses during the regular school year in its educational program. How do i amend my tax return online During the summer, the school operates a tennis club open to the general public. How do i amend my tax return online Employees of the school run the club, including collecting membership fees and scheduling court time. How do i amend my tax return online   Another exempt school leases the same type of facilities to an unrelated individual who runs a tennis club for the summer. How do i amend my tax return online The lease is for a fixed fee that does not depend on the income or profits derived from the leased property. How do i amend my tax return online   In both situations, the exempt purpose is the advancement of education. How do i amend my tax return online Furnishing tennis facilities in the manner described does not further that exempt purpose. How do i amend my tax return online These activities are unrelated trades or businesses. How do i amend my tax return online However, in the second situation the income derived from the leasing of the property is excluded from unrelated business taxable income as rent from real property. How do i amend my tax return online See Rents under Exclusions in chapter 4. How do i amend my tax return online Services provided with lease. How do i amend my tax return online   An exempt university leases its football stadium during several months of the year to a professional football team for a fixed fee. How do i amend my tax return online Under the lease agreement, the university furnishes heat, light, and water and is responsible for all ground maintenance. How do i amend my tax return online It also provides dressing room, linen, and stadium security services for the professional team. How do i amend my tax return online   Leasing of the stadium is an unrelated trade or business. How do i amend my tax return online In addition, the substantial services furnished for the convenience of the lessee go beyond those usually provided with the rental of space for occupancy only. How do i amend my tax return online Therefore, the income from this lease is rent from real property and unrelated business taxable income. How do i amend my tax return online Broadcasting rights. How do i amend my tax return online   An exempt collegiate athletic conference conducts an annual competitive athletic game between its conference champion and another collegiate team. How do i amend my tax return online Income is derived from admission charges and the sale of exclusive broadcasting rights to a national radio and television network. How do i amend my tax return online An athletic program is considered an integral part of the educational process of a university. How do i amend my tax return online   The educational purposes served by intercollegiate athletics are identical whether conducted directly by individual universities or by their regional athletic conference. How do i amend my tax return online Also, the educational purposes served by exhibiting a game before an audience that is physically present and exhibiting the game on television or radio before a much larger audience are substantially similar. How do i amend my tax return online Therefore, the sale of the broadcasting rights contributes importantly to the accomplishment of the organization's exempt purpose and is not an unrelated trade or business. How do i amend my tax return online   In a similar situation, an exempt organization was created as a national governing body for amateur athletes to foster interest in amateur sports and to encourage widespread public participation. How do i amend my tax return online The organization receives income each year from the sale of exclusive broadcasting rights to an independent producer, who contracts with a commercial network to broadcast many of the athletic events sponsored, supervised, and regulated by the organization. How do i amend my tax return online   The broadcasting of these events promotes the various amateur sports, fosters widespread public interest in the benefits of the organization's nationwide amateur program, and encourages public participation. How do i amend my tax return online The sale of the rights and the broadcasting of the events contribute importantly to the organization's exempt purpose. How do i amend my tax return online Therefore, the sale of the exclusive broadcasting rights is not an unrelated trade or business. How do i amend my tax return online Yearbook advertising. How do i amend my tax return online   An exempt organization receives income from the sale of advertising in its annual yearbook. How do i amend my tax return online The organization hires an independent commercial firm, under a contract covering a full calendar year, to conduct an intensive advertising solicitation campaign in the organization's name. How do i amend my tax return online This firm is paid a percentage of the gross advertising receipts for selling the advertising, collecting from advertisers, and printing the yearbook. How do i amend my tax return online This advertising activity is an unrelated trade or business. How do i amend my tax return online Pet boarding and grooming services. How do i amend my tax return online   An exempt organization, organized and operated for the prevention of cruelty to animals, receives unrelated business income from providing pet boarding and grooming services for the general public. How do i amend my tax return online These activities do not contribute importantly to its purpose of preventing cruelty to animals. How do i amend my tax return online Museum eating facilities. How do i amend my tax return online   An exempt art museum operates a dining room, a cafeteria, and a snack bar for use by the museum staff, employees, and visitors. How do i amend my tax return online Eating facilities in the museum help to attract visitors and allow them to spend more time viewing the museum's exhibits without having to seek outside restaurants at mealtime. How do i amend my tax return online The eating facilities also allow the museum staff and employees to remain in the museum throughout the day. How do i amend my tax return online Thus, the museum's operation of the eating facilities contributes importantly to the accomplishment of its exempt purposes and is not unrelated trade or business. How do i amend my tax return online Halfway house workshop. How do i amend my tax return online   A halfway house organized to provide room, board, therapy, and counseling for persons discharged from alcoholic treatment centers also operates a furniture shop to provide full-time employment for its residents. How do i amend my tax return online The profits are applied to the operating costs of the halfway house. How do i amend my tax return online The income from this venture is not unrelated trade or business income because the furniture shop contributes importantly to the organization's purpose of aiding its residents' transition from treatment to a normal and productive life. How do i amend my tax return online Travel tour programs. How do i amend my tax return online   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose for which tax exemption was granted to the organization. How do i amend my tax return online Example 1. How do i amend my tax return online A tax-exempt university alumni association provides a travel tour program for its members and their families. How do i amend my tax return online The organization works with various travel agencies and schedules approximately ten tours a year to various places around the world. How do i amend my tax return online It mails out promotional material and accepts reservations for fees paid by the travel agencies on a per-person basis. How do i amend my tax return online The organization provides an employee for each tour as a tour leader. How do i amend my tax return online There is no formal educational program conducted with these tours, and they do not differ from regular commercially operated tours. How do i amend my tax return online By providing travel tours to its members, the organization is engaging in a regularly conducted trade or business. How do i amend my tax return online Even if the tours it offers support the university, financially and otherwise, and encourage alumni to do the same, they do not contribute importantly to the organization's exempt purpose of promoting education. How do i amend my tax return online Therefore, the sale of the travel tours is an unrelated trade or business. How do i amend my tax return online Example 2. How do i amend my tax return online A tax-exempt organization formed for the purpose of educating individuals about the geography and the culture of the United States provides study tours to national parks and other locations within the United States. How do i amend my tax return online These tours are conducted by teachers and others certified by the state board of education. How do i amend my tax return online The tours are primarily designed for students enrolled in degree programs at state educational institutions but are open to all who agree to participate in the required study program associated with the tour taken. How do i amend my tax return online A tour's study program consists of instruction on subjects related to the location being visited on the tour. How do i amend my tax return online Each tour group brings along a library of material related to the subjects being studied on the tour. How do i amend my tax return online During the tour, 5 or 6 hours per day are devoted to organized study, preparation of reports, lectures, instruction, and recitation by the students. How do i amend my tax return online Examinations are given at the end of each tour. How do i amend my tax return online The state board of education awards academic credit for tour participation. How do i amend my tax return online Because these tours are substantially related to the organization's exempt purpose, they are not an unrelated trade or business. How do i amend my tax return online Insurance programs. How do i amend my tax return online   An organization that acts as a group insurance policyholder for its members and collects a fee for performing administrative services is normally carrying on an unrelated trade or business. How do i amend my tax return online Exceptions. How do i amend my tax return online   Organizations whose exempt activities may include the provision of insurance benefits, such as fraternal beneficiary societies, voluntary employees beneficiary associations, and labor organizations, are generally exceptions to this rule. How do i amend my tax return online Magazine publishing. How do i amend my tax return online   An association of credit unions with tax-exempt status as a business league publishes a consumer-oriented magazine four times a year and makes it available to member credit unions for purchase. How do i amend my tax return online   By selling a magazine to its members as a promotional device, the organization furnishes its members with a regular commercial service they can use in their own operations. How do i amend my tax return online This service does not promote the improvement of business conditions of one or more lines of business, which is the exempt purpose of a business league. How do i amend my tax return online   Since the activity does not contribute importantly to the organization's exempt function, it is an unrelated trade or business. How do i amend my tax return online Directory of members. How do i amend my tax return online   A business league publishes an annual directory that contains a list of all its members, their addresses, and their area of expertise. How do i amend my tax return online Each member has the same amount of space in the directory, and its format does not emphasize the relative importance or reputation of any member. How do i amend my tax return online The directory contains no commercial advertisement and is sold only to the organization's members. How do i amend my tax return online   The directory facilitates communication among the members and encourages the exchange of ideas and expertise. How do i amend my tax return online Because the directory lists the members in a similar noncommercial format without advertising and is not distributed to the public, its sale does not confer private commercial benefits on the members. How do i amend my tax return online The sale of the directory does contribute importantly to the organization's exempt purpose and is not an unrelated trade or business. How do i amend my tax return online This directory differs from the publication discussed next because of its noncommercial characteristics. How do i amend my tax return online Sales of advertising space. How do i amend my tax return online   A national association of law enforcement officials publishes a monthly journal that contains articles and other editorial material of professional interest to its members. How do i amend my tax return online The journal is distributed without charge, mainly to the organization's members. How do i amend my tax return online   The organization sells advertising space in the journal either for conventional advertising or to merely identify the purchaser without a commercial message. How do i amend my tax return online Some of the noncommercial advertising identifies the purchaser in a separate space, and some consists of listings of 60 or more purchasers per page. How do i amend my tax return online A business firm identified in a separate space is further identified in an Index of Advertisers. How do i amend my tax return online   The organization solicits advertising by personal contacts. How do i amend my tax return online Advertising from large firms is solicited by contacting their chief executive officer or community relations officer rather than their advertising manager. How do i amend my tax return online The organization also solicits advertising in form letters appealing for corporate and personal contributions. How do i amend my tax return online   An exempt organization's sale of advertising placed for the purchaser's commercial benefit is a commercial activity. How do i amend my tax return online Goodwill derived by the purchaser from being identified as a patron of the organization is usually considered a form of commercial benefit. How do i amend my tax return online Therefore, advertising in an exempt organization's publication is generally presumed to be placed for the purchaser's commercial benefit, even if it has no commercial message. How do i amend my tax return online However, this presumption is not conclusive if the purchaser's patronage would be difficult to justify commercially in view of the facts and circumstances. How do i amend my tax return online In that case, other factors should also be considered in determining whether a commercial benefit can be expected. How do i amend my tax return online Those other factors include: The normal manner in which the publication is circulated; The territorial scope of the circulation; The extent to which its readers, promoters, or the like could reasonably be expected to further, either directly or indirectly, the commercial interest of the advertisers; The eligibility of the publishing organization to receive tax-deductible contributions; and The commercial or noncommercial methods used to solicit the advertisers. How do i amend my tax return online   In this situation, the purchaser of a separate advertising space without a commercial message can nevertheless expect a commercial benefit from the goodwill derived from being identified in that manner as a patron of the organization. How do i amend my tax return online However, the purchaser of a listing cannot expect more than an inconsequential benefit. How do i amend my tax return online Therefore, the sale of separate spaces, but not the listings, is an unrelated trade or business. How do i amend my tax return online Publishing legal notices. How do i amend my tax return online   A bar association publishes a legal journal containing opinions of the county court, articles of professional interest to lawyers, advertisements for products and services used by the legal profession, and legal notices. How do i amend my tax return online The legal notices are published to satisfy state laws requiring publication of notices in connection with legal proceedings, such as the administration of estates and actions to quiet title to real property. How do i amend my tax return online The state designated the bar association's journal as the place to publish the required notices. How do i amend my tax return online   The publication of ordinary commercial advertising does not advance the exempt purposes of the association even when published in a periodical that contains material related to exempt purposes. How do i amend my tax return online Although the advertising is directed specifically to members of the legal profession, it is still commercial in nature and does not contribute importantly to the exempt purposes of the association. How do i amend my tax return online Therefore, the advertising income is unrelated trade or business income. How do i amend my tax return online   On the other hand, the publication of legal notices is distinguishable from ordinary commercial advertising in that its purpose is to inform the general public of significant legal events rather than to stimulate demand for the products or services of an advertiser. How do i amend my tax return online This promotes the common interests of the legal profession and contributes importantly to the association's exempt purposes. How do i amend my tax return online Therefore, the publishing of legal notices does not constitute an unrelated trade or business. How do i amend my tax return online Museum greeting card sales. How do i amend my tax return online    An art museum that exhibits modern art sells greeting cards that display printed reproductions of selected works from other art collections. How do i amend my tax return online Each card is imprinted with the name of the artist, the title or subject matter of the work, the date or period of its creation, if known, and the museum's name. How do i amend my tax return online The cards contain appropriate greetings and are personalized on request. How do i amend my tax return online   The organization sells the cards in the shop it operates in the museum and sells them at quantity discounts to retail stores. How do i amend my tax return online It also sells them by mail order through a catalog that is advertised in magazines and other publications throughout the year. How do i amend my tax return online As a result, a large number of cards are sold at a significant profit. How do i amend my tax return online   The museum is exempt as an educational organization on the basis of its ownership, maintenance, and exhibition for public viewing of works of art. How do i amend my tax return online The sale of greeting cards with printed reproductions of artworks contributes importantly to the achievement of the museum's exempt educational purposes by enhancing public awareness, interest, and appreciation of art. How do i amend my tax return online The cards may encourage more people to visit the museum itself to share in its educational programs. How do i amend my tax return online The fact that the cards are promoted and sold in a commercial manner at a profit and in competition with commercial greeting card publishers does not alter the fact that the activity is related to the museum's exempt purpose. How do i amend my tax return online Therefore, these sales activities are not an unrelated trade or business. How do i amend my tax return online Museum shop. How do i amend my tax return online   An art museum maintained and operated for the exhibition of American folk art operates a shop in the museum that sells: Reproductions of works in the museum's own collection and reproductions of artistic works from the collections of other art museums (prints suitable for framing, postcards, greeting cards, and slides); Metal, wood, and ceramic copies of American folk art objects from its own collection and similar copies of art objects from other collections of artworks; Instructional literature and scientific books and souvenir items concerning the history and development of art and, in particular, of American folk art; and Scientific books and souvenir items of the city in which the museum is located. How do i amend my tax return online   The shop also rents originals or reproductions of paintings contained in its collection. How do i amend my tax return online All of its reproductions are imprinted with the name of the artist, the title or subject matter of the work from which it is reproduced, and the museum's name. How do i amend my tax return online   Each line of merchandise must be considered separately to determine if sales are related to the exempt purpose. How do i amend my tax return online   The sale and rental of reproductions and copies of works from the museum's own collection and reproductions of artistic works not owned by the museum contribute importantly to the achievement of the museum's exempt educational purpose by making works of art familiar to a broader segment of the public, thereby enhancing the public's understanding and appreciation of art. How do i amend my tax return online The same is true for the sale of literature relating to art. How do i amend my tax return online Therefore, these sales activities are not an unrelated trade or business. How do i amend my tax return online   On the other hand, the sale of scientific books and souvenir items of the city where the museum is located has no causal relationship to art or to artistic endeavor and, therefore, does not contribute importantly to the accomplishment of the museum's exempt educational purposes. How do i amend my tax return online The fact that selling some of these items could, under different circumstances, be held related to the exempt educational purpose of some other exempt educational organization does not change this conclusion. How do i amend my tax return online Additionally, the sale of these items does not lose its identity as a trade or business merely because the museum also sells articles which do contribute importantly to the accomplishment of its exempt function. How do i amend my tax return online Therefore, these sales are an unrelated trade or business. How do i amend my tax return online Business league's parking and bus services. How do i amend my tax return online   A business league, whose purpose is to retain and stimulate trade in a downtown area that has inadequate parking facilities, operates a fringe parking lot and shuttle bus service. How do i amend my tax return online It also operates, as an insubstantial part of its activities, a park and shop plan. How do i amend my tax return online   The fringe parking lot and shuttle bus service operate in a manner that does not favor any individual or group of downtown merchants. How do i amend my tax return online The merchants cannot offer free or discount parking or bus fares to their customers. How do i amend my tax return online   The park and shop plan allows customers of particular merchants to park free at certain parking lots in the area. How do i amend my tax return online Merchants participating in this plan buy parking stamps, which they distribute to their customers to use to pay for parking. How do i amend my tax return online   Operating the fringe parking lot and shuttle bus service provides easy and convenient access to the downtown area and, therefore, stimulates and improves business conditions in the downtown area generally. How do i amend my tax return online That activity contributes importantly to the organization's accomplishing its exempt purpose and is not an unrelated trade or business. How do i amend my tax return online   The park and shop plan encourages customers to use a limited number of participating member merchants in order to obtain free parking. How do i amend my tax return online This provides a particular service to individual members of the organization and does not further its exempt purpose. How do i amend my tax return online Therefore, operating the park and shop plan is an unrelated trade or business. How do i amend my tax return online Youth residence. How do i amend my tax return online   An exempt organization, whose purpose is to provide for the welfare of young people, rents rooms primarily to people under age 25. How do i amend my tax return online The residence units are operated on, and as a part of, the premises in which the organization carries on the social, recreational, and guidance programs for which it was recognized as exempt. How do i amend my tax return online The facilities are under the management and supervision of trained career professionals who provide residents with personal counseling, physical education programs, and group recreational activities. How do i amend my tax return online The rentals are not an unrelated trade or business because renting the rooms is substantially related to the organization's exempt purpose. How do i amend my tax return online Health club program. How do i amend my tax return online   An exempt charitable organization's purpose is to provide for the welfare of young people. How do i amend my tax return online The organization conducts charitable activities and maintains facilities that will contribute to the physical, social, mental, and spiritual health of young people at minimum or no cost to them. How do i amend my tax return online Nominal annual dues are charged for membership in the organization and use of the facilities. How do i amend my tax return online   In addition, the organization organized a health club program that its members could join for an annual fee in addition to the annual dues. How do i amend my tax return online The annual fee is comparable to fees charged by similar local commercial health clubs and is sufficiently high to restrict participation in the program to a limited number of members of the community. How do i amend my tax return online   The health club program is in addition to the general physical fitness program of the organization. How do i amend my tax return online Operating this program does not contribute importantly to the organization's accomplishing its exempt purpose and, therefore, is an unrelated trade or business. How do i amend my tax return online Miniature golf course. How do i amend my tax return online   An exempt youth welfare organization operates a miniature golf course that is open to the general public. How do i amend my tax return online The course, which is managed by salaried employees, is substantially similar to commercial courses. How do i amend my tax return online The admission fees charged are comparable to fees of commercial facilities and are designed to return a profit. How do i amend my tax return online   The operation of the miniature golf course in a commercial manner does not contribute importantly to the accomplishment of the organization's exempt purpose and, therefore, is an unrelated trade or business. How do i amend my tax return online Sales of hearing aids. How do i amend my tax return online   A tax-exempt hospital, whose primary activity is rehabilitation, sells hearing aids to patients. How do i amend my tax return online This activity is an essential part of the hospital's program to test and evaluate patients with hearing deficiencies and contributes importantly to its exempt purpose. How do i amend my tax return online It is not an unrelated trade or business. How do i amend my tax return online Nonpatient laboratory testing. How do i amend my tax return online   Nonpatient laboratory testing performed by a tax-exempt teaching hospital on specimens needed for the conduct of its teaching activities is not an unrelated trade or business. How do i amend my tax return online However, laboratory testing performed by a tax-exempt non-teaching hospital on referred specimens from private office patients of staff physicians is an unrelated trade or business if these services are otherwise available in the community. How do i amend my tax return online Selling endorsements. How do i amend my tax return online   An exempt scientific organization enjoys an excellent reputation in the field of biological research. How do i amend my tax return online It exploits this reputation regularly by selling endorsements of laboratory equipment to manufacturers. How do i amend my tax return online Endorsing laboratory equipment does not contribute importantly to the accomplishment of any purpose for which exemption is granted to the organization. How do i amend my tax return online Accordingly, the sale of endorsements is an unrelated trade or business. How do i amend my tax return online Sponsoring entertainment events. How do i amend my tax return online   An exempt university has a regular faculty and a regularly enrolled student body. How do i amend my tax return online During the school year, the university sponsors the appearance of professional theater companies and symphony orchestras that present drama and musical performances for the students and faculty members. How do i amend my tax return online Members of the general public also are admitted. How do i amend my tax return online The university advertises these performances and supervises advance ticket sales at various places, including such university facilities as the cafeteria and the university bookstore. How do i amend my tax return online Although the presentation of the performances makes use of an intangible generated by the university's exempt educational functions—the presence of the student body and faculty—such drama and music events contribute importantly to the overall educational and cultural functions of the university. How do i amend my tax return online Therefore, the activity is not an unrelated trade or business. How do i amend my tax return online Excluded Trade or Business Activities The following activities are specifically excluded from the definition of unrelated trade or business. How do i amend my tax return online Volunteer workforce. How do i amend my tax return online   Any trade or business in which substantially all the work is performed for the organization without compensation is not an unrelated trade or business. How do i amend my tax return online Example 1. How do i amend my tax return online A retail store operated by an exempt orphanage where unpaid volunteers perform substantially all the work in carrying on the business is not an unrelated trade or business. How do i amend my tax return online Example 2. How do i amend my tax return online A volunteer fire company conducts weekly public dances. How do i amend my tax return online Holding public dances and charging admission on a regular basis may, given the facts and circumstances of a particular case, be considered an unrelated trade or business. How do i amend my tax return online However, because the work at the dances is performed by unpaid volunteers, the activity is not an unrelated trade or business. How do i amend my tax return online Convenience of members. How do i amend my tax return online   A trade or business conducted by a 501(c)(3) organization or by a governmental college or university primarily for the convenience of its members, students, patients, officers, or employees is not an unrelated trade or business. How do i amend my tax return online For example, a laundry operated by a college for the purpose of laundering dormitory linens and students' clothing is not an unrelated trade or business. How do i amend my tax return online Qualified sponsorship activities. How do i amend my tax return online   Soliciting and receiving qualified sponsorship payments is not an unrelated trade or business, and the payments are not subject to unrelated business income tax. How do i amend my tax return online Qualified sponsorship payment. How do i amend my tax return online   This is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization's activities. How do i amend my tax return online “Use or acknowledgment” does not include advertising the sponsor's products or services. How do i amend my tax return online The organization's activities include all its activities, whether or not related to its exempt purposes. How do i amend my tax return online   For example, if, in return for receiving a sponsorship payment, an organization promises to use the sponsor's name or logo in acknowledging the sponsor's support for an educational or fundraising event, the payment is a qualified sponsorship payment and is not subject to the unrelated business income tax. How do i amend my tax return online   Providing facilities, services, or other privileges (for example, complimentary tickets, pro-am playing spots in golf tournaments, or receptions for major donors) to a sponsor or the sponsor's designees in connection with a sponsorship payment does not affect whether the payment is a qualified sponsorship payment. How do i amend my tax return online Instead, providing these goods or services is treated as a separate transaction in determining whether the organization has unrelated business income from the event. How do i amend my tax return online Generally, if the services or facilities are not a substantial benefit or if providing them is a related business activity, the payments will not be subject to the unrelated business income tax. How do i amend my tax return online   Similarly, the sponsor's receipt of a license to use an intangible asset (for example, a trademark, logo, or designation) of the organization is treated as separate from the qualified sponsorship transaction in determining whether the organization has unrelated business taxable income. How do i amend my tax return online   If part of a payment would be a qualified sponsorship payment if paid separately, that part is treated as a separate payment. How do i amend my tax return online For example, if a sponsorship payment entitles the sponsor to both product advertising and the use or acknowledgment of the sponsor's name or logo by the organization, then the unrelated business income tax does not apply to the part of the payment that is more than the fair market value of the product advertising. How do i amend my tax return online Advertising. How do i amend my tax return online   A payment is not a qualified sponsorship payment if, in return, the organization advertises the sponsor's products or services. How do i amend my tax return online For information on the treatment of payments for advertising, see Exploitation of Exempt Activity—Advertising Sales in chapter 4. How do i amend my tax return online   Advertising includes: Messages containing qualitative or comparative language, price information, or other indications of savings or value; Endorsements; and Inducements to purchase, sell, or use the products or services. How do i amend my tax return online   The use of promotional logos or slogans that are an established part of the sponsor's identity is not, by itself, advertising. How do i amend my tax return online In addition, mere distribution or display of a sponsor's product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising. How do i amend my tax return online Exception for contingent payments. How do i amend my tax return online   A payment is not a qualified sponsorship payment if its amount is contingent, by contract or otherwise, upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events. How do i amend my tax return online However, the fact that a sponsorship payment is contingent upon an event actually taking place or being broadcast does not, by itself, affect whether a payment qualifies. How do i amend my tax return online Exception for periodicals. How do i amend my tax return online   A payment is not a qualified sponsorship payment if it entitles the payer to the use or acknowledgment of the business name, logo, or product lines in the organization's periodical. How do i amend my tax return online For this purpose, a periodical is any regularly scheduled and printed material (for example, a monthly journal) published by or on behalf of the organization. How do i amend my tax return online It does not include material that is related to and primarily distributed in connection with a specific event conducted by the organization (for example, a program or brochure distributed at a sponsored event). How do i amend my tax return online   The treatment of payments that entitle the payer to the depiction of the payer's name, logo, or products lines in an organization's periodical is determined under the rules that apply to advertising activities. How do i amend my tax return online See Sales of advertising space under Examples, earlier in this chapter. How do i amend my tax return online Also see Exploitation of Exempt Activity—Advertising Sales in chapter 4. How do i amend my tax return online Exception for conventions and trade shows. How do i amend my tax return online   A payment is not a qualified sponsorship payment if it is made in connection with any qualified convention or trade show activity. How do i amend my tax return online The exclusion of qualified convention or trade show activities from the definition of unrelated trade or business is explained later under Convention or trade show activity. How do i amend my tax return online Selling donated merchandise. How do i amend my tax return online   A trade or business that consists of selling merchandise, substantially all of which the organization received as gifts or contributions, is not an unrelated trade or business. How do i amend my tax return online For example, a thrift shop operated by a tax-exempt organization that sells donated clothes and books to the general public, with the proceeds going to the exempt organization, is not an unrelated trade or business. How do i amend my tax return online Employee association sales. How do i amend my tax return online   The sale of certain items by a local association of employees described in section 501(c)(4), organized before May 17, 1969, is not an unrelated trade or business if the items are sold for the convenience of the association's members at their usual place of employment. How do i amend my tax return online This exclusion applies only to the sale of work-related clothes and equipment and items normally sold through vending machines, food dispensing facilities, or by snack bars. How do i amend my tax return online Bingo games. How do i amend my tax return online   Certain bingo games are not included in the term “unrelated trade or business. How do i amend my tax return online ” To qualify for this exclusion, the bingo game must meet the following requirements. How do i amend my tax return online It meets the legal definition of bingo. How do i amend my tax return online It is legal where it is played. How do i amend my tax return online It is played in a jurisdiction where bingo games are not regularly conducted by for-profit organizations. How do i amend my tax return online Legal definition. How do i amend my tax return online   For a game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game. How do i amend my tax return online   A wagering game that does not meet the legal definition of bingo does not qualify for the exclusion, regardless of its name. How do i amend my tax return online For example, “instant bingo,” in which a player buys a pre-packaged bingo card with pull-tabs that the player removes to determine if he or she is a winner, does not qualify. How do i amend my tax return online Legal where played. How do i amend my tax return online   This exclusion applies only if bingo is legal under the laws of the jurisdiction where it is conducted. How do i amend my tax return online The fact that a jurisdiction's law that prohibits bingo is rarely enforced or is widely disregarded does not make the conduct of bingo legal for this purpose. How do i amend my tax return online No for-profit games where played. How do i amend my tax return online   This exclusion applies only if for-profit organizations cannot regularly conduct bingo games in any part of the same jurisdiction. How do i amend my tax return online Jurisdiction is normally the entire state; however, in certain situations, local jurisdiction will control. How do i amend my tax return online Example. How do i amend my tax return online Tax-exempt organizations X and Y are organized under the laws of state N, which has a law that permits exempt organizations to conduct bingo games. How do i amend my tax return online In addition, for-profit organizations are permitted to conduct bingo games in city S, a resort community located in county R. How do i amend my tax return online Several for-profit organizations conduct nightly games. How do i amend my tax return online Y conducts weekly bingo games in city S, while X conducts weekly games in county R. How do i amend my tax return online Since state law confines the for-profit organizations to city S, local jurisdiction controls. How do i amend my tax return online Y's bingo games conducted in city S are an unrelated trade or business. How do i amend my tax return online However, X's bingo games conducted in county R outside of city S are not an unrelated trade or business. How do i amend my tax return online Gambling activities other than bingo. How do i amend my tax return online   Any game of chance conducted by an exempt organization in North Dakota is not an unrelated trade or business if conducting the game does not violate any state or local law. How do i amend my tax return online Pole rentals. How do i amend my tax return online   The term unrelated trade or business does not include qualified pole rentals by a mutual or cooperative telephone or electric company described in section 501(c)(12). How do i amend my tax return online A qualified pole rental is the rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that the company uses in providing telephone or electric services to its members, and According to the rental, to support one or more wires (in addition to the wires described in 1 ) for use in connection with the transmission by wire of electricity or of telephone or other communications. How do i amend my tax return online For this purpose, the term rental includes any sale of the right to use the pole (or other structure). How do i amend my tax return online Distribution of low cost articles. How do i amend my tax return online   The term unrelated trade or business does not include activities relating to the distribution of low cost articles incidental to soliciting charitable contributions. How do i amend my tax return online This applies to organizations described in section 501 that are eligible to receive charitable contributions. How do i amend my tax return online   A distribution is considered incidental to the solicitation of a charitable contribution if: The recipient did not request the distribution, The distribution is made without the express consent of the recipient, and The article is accompanied by a request for a charitable contribution to the organization and a statement that the recipient may keep the low cost article regardless of whether a contribution is made. How do i amend my tax return online   An article is considered low cost if the cost of an item (or the aggregate costs if more than one item) distributed to a single recipient in a tax year is not more than $5, indexed annually for inflation. How do i amend my tax return online The maximum cost of a low cost article is $9. How do i amend my tax return online 70 for 2011. How do i amend my tax return online The cost of an article is the cost to the organization that distributes the item or on whose behalf it is distributed. How do i amend my tax return online Exchange or rental of member lists. How do i amend my tax return online   The exchange or rental of member or donor lists between organizations described in section 501 that are eligible to receive charitable contributions is not included in the term unrelated trade or business. How do i amend my tax return online Hospital services. How do i amend my tax return online   The providing of certain services at or below cost by an exempt hospital to other exempt hospitals that have facilities for 100 or fewer inpatients is not an unrelated trade or business. How do i amend my tax return online This exclusion applies only to services described in section 501(e)(1)(A). How do i amend my tax return online Public entertainment activity. How do i amend my tax return online   An unrelated trade or business does not include a qualified public entertainment activity. How do i amend my tax return online A public entertainment activity is one traditionally conducted at a fair or exposition promoting agriculture and education, including any activity whose purpose is designed to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. How do i amend my tax return online   A qualified public entertainment activity is one conducted by a qualifying organization: In conjunction with an international, national, state, regional, or local fair or exposition; In accordance with state law that permits the activity to be operated or conducted solely by such an organization or by an agency, instrumentality, or political subdivision of the state; or In accordance with state law that permits an organization to be granted a license to conduct an activity for not more than 20 days on paying the state a lower percentage of the revenue from the activity than the state charges nonqualifying organizations that hold similar activities. How do i amend my tax return online   For these purposes, a qualifying organization is an organization described in section 501(c)(3), 501(c)(4), or 501(c)(5) that regularly conducts an agricultural and educational fair or exposition as one of its substantial exempt purposes. How do i amend my tax return online Its conducting qualified public entertainment activities will not affect determination of its exempt status. How do i amend my tax return online Convention or trade show activity. How do i amend my tax return online   An unrelated trade or business does not include qualified convention or trade show activities conducted at a convention, annual meeting, or trade show. How do i amend my tax return online   A qualified convention or trade show activity is any activity of a kind traditionally conducted by a qualifying organization in conjunction with an international, national, state, regional, or local convention, annual meeting, or show if: One of the purposes of the organization in sponsoring the activity is promoting and stimulating interest in, and demand for, the products and services of that industry or educating the persons in attendance regarding new products and services or new rules and regulations affecting the industry; and The show is designed to achieve its purpose through the character of the exhibits and the extent of the industry products that are displayed. How do i amend my tax return online   For these purposes, a qualifying organization is one described in section 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6). How do i amend my tax return online The organization must regularly conduct, as one of its substantial exempt purposes, a qualified convention or trade show activity. How do i amend my tax return online   The rental of display space to exhibitors (including exhibitors who are suppliers) at a qualified convention or trade show is not an unrelated trade or business even if the exhibitors who rent the space are permitted to sell or solicit orders. How do i amend my tax return online For this purpose, a supplier's exhibit is one in which the exhibitor displays goods or services that are supplied to, rather than by, members of the qualifying organization in the conduct of these members' own trades or businesses. How do i amend my tax return online    Certain Internet activities conducted by a trade association described in section 501(c)(6) will be considered qualified convention and trade show activity if conducted on a special supplementary section of the association's website in conjunction with a trade show conducted by the association. How do i amend my tax return online The trade show itself must be a qualified convention and trade show activity. How do i amend my tax return online The supplementary section of the website must be ancillary to, and serve to augment and enhance, the trade show, as when it makes available the same information available at the trade show and is available only during a time period that coincides with the time period that the trade show is in operation. How do i amend my tax return online Conversely, Internet activities that are not conducted in conjunction with a qualified convention and trade show activity and that do not augment and enhance the trade show cannot themselves be qualified convention and trade show activity. How do i amend my tax return online Prev  Up  Next   Home   More Online Publications