A Profit-Related Activity of an Exempt Organization Avoids the Unrelated

question 121

True/False

A profit-related activity of an exempt organization avoids the unrelated business income tax if greater than 50% of the merchandise sold had been received as a contribution.

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Definitions:

Agency Relationship

A legal bond where one party, the agent, acts on behalf of another party, the principal, in a business transaction.

Irrevocable

Something that cannot be changed, reversed, or undone, typically referring to certain contracts, trusts, or agreements.

Coupled With An Interest

A right or benefit that cannot be taken away because it is legally attached to another property or contractual right.

Agency Agreement

A legal contract creating a fiduciary relationship wherein the first party ("the principal") agrees that the actions of a second party ("the agent") binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements.