Which of the Following Statements Is Correct Regarding the Unrelated

question 6

Multiple Choice

Which of the following statements is correct regarding the unrelated business income tax (UBIT) ?

• A) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization.
• B) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization.
• C) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year.
• D) An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT.
• E) None of these statements is correct.

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Definitions:

Lords of the Loom

Lords of the Loom were wealthy textile manufacturers in the northeastern United States during the 19th century, notable for their economic and social influence, particularly in the development of the factory system.

Textile Operations

The various processes involved in the manufacturing of fabric, including spinning, weaving, dyeing, and finishing.

World's Cotton Supply

The total amount of cotton available globally for use in textile manufacturing and other industries.

Southern United States

The Southern United States, often simply called the South, is a region in the southeastern and south-central United States known for its unique culture, history, and significant role in the nation's economic and political development.