Tax990 Knowledge Base

What is unrelated business taxable income in Form 990?

Unrelated business taxable income is the income produced by tax-exempt organizations through activities unrelated to the organization's primary tax-exempt purposes. 

For example, if a school generates income through activities unrelated to an educational purpose, the income will be considered an unrelated business taxable income.

An organization must file a Form 990-T if the gross unrelated business taxable income is $1000 or more. If an organization fails to do so, it must provide the IRS with a reasonable explanation on an attached Schedule O.