Which of the Following Conditions Would Exempt Income-Producing Activities from the Unrelated

question 168

Multiple Choice

Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax UBIT?

• A) Majority of labor is performed by paid employees.
• B) The business sells donated merchandise.
• C) The business is carried on regularly but is unrelated to the organization's tax-exempt purpose.
• D) The business is operated for a profit.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically, typically at the end of a reporting period.

Periodic

In accounting, periodic refers to a system or method where financial information and inventory levels are updated at specific intervals, rather than continuously.

Purchases

The total amount spent on goods and materials bought for resale or use in production during an accounting period.

Perpetual

A system of inventory management where records are updated immediately following a sale or purchase of goods.