Plus, Inc, Is a § 501(c)(3) Organization

question 145

Essay

Plus, Inc., is a § 501(c)(3) organization. It generates a small amount of net income each year. Ralph, the CEO of Plus, Inc., is concerned that Plus may be subject to the unrelated business income tax. Is there a materiality exception to this tax? A 501(c)(3) with "net income" does not automatically result in a UBIT classification. They must be conducting a trade or business that is regularly carried on and that is not substantially related to its exempt purpose.

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Definitions:

Business Case

A documented argument or rationale presented to justify a business project or investment, detailing the benefits, costs, and risks.

Diversity

The inclusion of different types of people (such as people of different races, cultures, genders, etc.) in a group or organization.

Homosocial Reproduction

The tendency of the dominant men in organizations to reproduce themselves in their own images through their hiring practices.

Sociological Department

A functional unit within academic institutions that focuses on the study and research of social behaviors, institutions, relationships, and cultures.