Unrelated Trade or Business

From TaxAlmanac

Unrelated business income is the income from a trade or business that is regularly carried on by an exempt organization and that is 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.

The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services.

Business activities of an exempt organization ordinarily are considered regularly carried on if they show a frequency and continuity, and are pursued in a manner similar to comparable commercial activities of nonexempt organizations.

A business activity is not substantially related to an organization's exempt purpose if it does not contribute importantly to accomplishing that purpose. Whether an activity contributes importantly depends in each case on the facts involved.