UBIT and the Christmas Cantata

Dave Moja Sep 30, 2015 | TaxTips


Troas Bible College (TBC), a private college that is exempt under I.R.C. section 501(c)(3), is planning a “Christmas Cantata” by a renowned symphony orchestra from a European capital.  The College “hosts” several of these events during the year (so the activity would be considered “regularly carried on”).  TBC advertises these performances and supervises advance ticket sales at various places, including such college facilities as the cafeteria and the college bookstore.  They call to ask us whether this event would be and unrelated business activity and whether this – and the other events of its type – would require separate accounting and Form 990-T filing.

We respond that it is a management best practice to account for events such as this separately, but the event – nor those like it – would be unrelated because the activity appears to have a “direct, causal” relationship to TBC’s exempt purpose.  Another good management practice is to document how/why these activities are related to TBC’s exempt purpose.

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