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Turbotax For Military Members

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Turbotax For Military Members

Turbotax for military members 33. Turbotax for military members   Crédito para Ancianos o Personas Incapacitadas Table of Contents Introduction Useful Items - You may want to see: ¿Reúne los Requisitos del Crédito?Persona que Reúne los Requisitos Límites sobre los Ingresos Cómo Reclamar el CréditoEl Crédito Calculado por el IRS El Crédito Calculado por Usted Mismo Introduction Si reúne los requisitos, tal vez pueda reducir los impuestos que adeuda tomando el crédito para ancianos o personas incapacitadas, el cual se calcula en el Anexo R (Formulario 1040A o Formulario 1040). Turbotax for military members Este capítulo trata lo siguiente: Quién reúne los requisitos para reclamar el crédito para ancianos o personas incapacitadas. Turbotax for military members Cómo reclamar el crédito. Turbotax for military members Tal vez pueda tomar el crédito para ancianos o personas incapacitadas si: Tiene 65 años de edad o más al final del año 2013 o Se jubiló por incapacidad total y permanente y recibe ingresos por incapacidad sujetos a impuestos. Turbotax for military members Useful Items - You may want to see: Publicación 524 Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés 554 Tax Guide for Seniors (Guía tributaria para personas de la tercera edad), en inglés Formulario (e Instrucciones) Anexo R (Formulario 1040A o 1040) Credit for the Elderly or the Disabled (Crédito para ancianos o personas incapacitadas), en inglés ¿Reúne los Requisitos del Crédito? Puede reclamar el crédito para ancianos o personas incapacitadas si le corresponden ambas situaciones: Usted es una persona que reúne los requisitos. Turbotax for military members Sus ingresos no sobrepasan determinados límites. Turbotax for military members Puede utilizar la Figura 33-A y la Tabla 33-1 como guía para ver si tiene derecho al crédito. Turbotax for military members Primero, utilice la Figura 33-A para saber si reúne los requisitos. Turbotax for military members En tal caso, pase a la Tabla 33-1 para asegurarse que sus ingresos no superen los límites correspondientes al crédito. Turbotax for military members Puede reclamar el crédito sólo si presenta el Formulario 1040 o el Formulario 1040A. Turbotax for military members No puede reclamar el crédito si presenta el Formulario 1040EZ. Turbotax for military members Persona que Reúne los Requisitos Usted reúne los requisitos de este crédito si es ciudadano estadounidense o extranjero residente y cualquiera de las siguientes situaciones le corresponden: Tenía 65 años de edad o más al final del año 2013. Turbotax for military members Tenía menos de 65 años de edad al final del año 2013 y se cumplen las tres condiciones siguientes: Se jubiló por incapacidad total y permanente (se explica más adelante). Turbotax for military members Recibió ingresos sujetos a impuestos por incapacidad durante 2013. Turbotax for military members En el día 1 de enero de 2013, no había alcanzado la edad de jubilación obligatoria (se define más adelante bajo Ingresos por incapacidad ). Turbotax for military members 65 años de edad. Turbotax for military members   Se considera que tiene 65 años el día antes de cumplir los 65 años. Turbotax for military members Por lo tanto, si nació el 1 de enero de 1949, se considera que tiene 65 años de edad al final de 2013. Turbotax for military members Ciudadano o Extranjero Residente de los Estados Unidos Para reclamar el crédito, tiene que ser ciudadano o extranjero residente de los Estados Unidos (o ser tratado como extranjero residente). Turbotax for military members Normalmente, no puede reclamar el crédito si fue extranjero no residente en algún momento durante el año tributario. Turbotax for military members Excepciones. Turbotax for military members   Tal vez pueda tomar el crédito si es extranjero no residente casado con un ciudadano o extranjero residente de los EE. Turbotax for military members UU. Turbotax for military members al final del año tributario, y usted y su cónyuge optan por tratarlo a usted como extranjero residente de los Estados Unidos. Turbotax for military members En tal caso, se gravan impuestos sobre los ingresos que usted y su cónyuge reciban de cualquier parte del mundo. Turbotax for military members Si era extranjero no residente al comenzar el año y residente extranjero al final del año, y estaba casado con un ciudadano o extranjero residente de los EE. Turbotax for military members UU. Turbotax for military members al final del año, tal vez pueda optar por ser considerado extranjero residente de los EE. Turbotax for military members UU. Turbotax for military members durante todo el año. Turbotax for military members En ese caso, quizás se le permita reclamar el crédito. Turbotax for military members Para más información sobre estas opciones, vea el capítulo 1 de la Publicación 519, U. Turbotax for military members S. Turbotax for military members Tax Guide for Aliens (Guía tributaria sobre los impuestos estadounidenses para extranjeros), en inglés. Turbotax for military members Personas Casadas Normalmente, si está casado al final del año tributario, usted y su cónyuge tienen que presentar una declaración conjunta para reclamar el crédito. Turbotax for military members No obstante, si usted y su cónyuge no vivieron en la misma vivienda en ningún momento durante el año tributario, pueden presentar una declaración conjunta o declaraciones separadas y aún reclamar el crédito. Turbotax for military members Cabeza de familia. Turbotax for military members   Puede presentar la declaración como cabeza de familia y satisfacer las condiciones del crédito, aun si su cónyuge vivió con usted durante los primeros 6 meses del año, si cumple ciertos requisitos. Turbotax for military members Vea Cabeza de Familia en el capítulo 2, para averiguar qué requisitos tiene que cumplir. Turbotax for military members Personas Menores de 65 Años de Edad Si tiene menos de 65 años de edad al final del año 2013, puede reunir los requisitos del crédito sólo si está jubilado por incapacidad total y permanente (se explica a continuación) y ha recibido ingresos por incapacidad sujetos a impuestos (se explica más adelante, bajo el tema Ingresos por incapacidad ). Turbotax for military members Se le considera jubilado por incapacidad total y permanente si: Estaba total y permanentemente incapacitado cuando se jubiló y Se jubiló por incapacidad antes del cierre del año tributario. Turbotax for military members Aunque no se jubile oficialmente, puede que se le considere jubilado por incapacidad cuando haya dejado de trabajar debido a su incapacidad. Turbotax for military members Si se jubiló por incapacidad antes de 1977 y no estaba total y permanentemente incapacitado en ese momento, puede cumplir los requisitos del crédito si estaba total y permanentemente incapacitado el 1 de enero de 1976 o el 1 de enero de 1977. Turbotax for military members Total y permanentemente incapacitado. Turbotax for military members    Está total y permanentemente incapacitado si no puede dedicarse a ninguna actividad sustancial remunerada a causa de una condición física o mental. Turbotax for military members Un médico calificado tiene que confirmar por escrito que dicha condición ha durado o puede durar 12 meses o más, o que dicha condición puede culminar en la muerte. Turbotax for military members Vea Declaración del médico , más adelante. Turbotax for military members Actividad sustancial remunerada. Turbotax for military members   Se define “actividad sustancial remunerada” como el desempeño de deberes importantes a lo largo de un período de tiempo razonable, mientras uno trabaje para recibir remuneración u obtener ganancias; o un trabajo generalmente realizado a cambio de remuneración o ganancias. Turbotax for military members El mantener un empleo a tiempo completo (o un empleo a tiempo parcial a conveniencia de su empleador) en un ambiente laboral competitivo donde se paga por lo menos el salario mínimo se considera una prueba contundente de que puede dedicarse a una actividad sustancial remunerada. Turbotax for military members   Los trabajos realizados para cuidarse a sí mismo o cuidar su vivienda no se consideran actividades sustanciales remuneradas. Turbotax for military members Tampoco se considera actividad sustancial remunerada: el trabajo no remunerado desempeñado en relación con los pasatiempos, la capacitación o terapia institucional, asistencia a una escuela, los clubes, programas sociales y otras actividades semejantes. Turbotax for military members No obstante, realizar este tipo de trabajo puede demostrar que usted es capaz de dedicarse a una actividad sustancial remunerada. Turbotax for military members    El hecho de que no haya trabajado por algún tiempo no se considera una prueba concluyente de que no pueda dedicarse a una actividad sustancial remunerada. Turbotax for military members Empleo en establecimientos protegidos. Turbotax for military members   Ciertos trabajos ofrecidos a personas con incapacidad física o mental en establecimientos que reúnen ciertos requisitos se consideran empleo protegido. Turbotax for military members Dichos sitios se ubican en establecimientos protegidos, tales como talleres, hospitales e instituciones parecidas, programas laborales o educativos en el hogar y asilos patrocinados por el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés). Turbotax for military members   En comparación con el empleo comercial, la remuneración del empleo en establecimientos protegidos es más baja. Turbotax for military members Por lo tanto, una persona no suele buscar empleo en establecimientos protegidos si puede encontrar otro empleo. Turbotax for military members El hecho de que una persona haya aceptado un empleo en establecimientos protegidos no comprueba que la persona pueda dedicarse a una actividad sustancial remunerada. Turbotax for military members Declaración del médico. Turbotax for military members   Si tiene menos de 65 años de edad, su médico tiene que certificar por escrito que usted estaba total y permanentemente incapacitado en la fecha en que se jubiló. Turbotax for military members Puede utilizar la declaración en las Instrucciones del Anexo R (Fomulario 1040A o 1040). Turbotax for military members    Please click here for the text description of the image. Turbotax for military members Figura 33−A. Turbotax for military members ¿Es Usted una Persona que Reúne los Requisitos? Tabla 33-1. Turbotax for military members Límites sobre los Ingresos SI su estado civil para efectos de la declaración es . Turbotax for military members . Turbotax for military members . Turbotax for military members . Turbotax for military members ENTONCES aun si reúne los requisitos (vea la Figura 33-A ), NO PUEDE reclamar el crédito si . Turbotax for military members . Turbotax for military members . Turbotax for military members . Turbotax for military members Tiene ingresos brutos ajustados (AGI, por sus siglas en inglés)* iguales o superiores a . Turbotax for military members . Turbotax for military members . Turbotax for military members . Turbotax for military members O el total de su Seguro Social no sujeto a impuestos además de otras pensiones, anualidades o ingreso por incapacidad no sujetos a impuestos es igual o superior a . Turbotax for military members . Turbotax for military members . Turbotax for military members . Turbotax for military members soltero, cabeza de familia o viudo que reúne los requisitos con hijo dependiente $17,500 $5,000 casado que presenta una declaración conjunta y sólo uno de los cónyuges reúne los requisitos de la Figura 33-A $20,000 $5,000 casado que presenta una declaración conjunta y ambos cónyuges reúnen los requisitos de la Figura 33-A $25,000 $7,500 casado que presenta una declaración por separado y usted y su cónyuge no vivieron en la misma vivienda en ningún momento del año 2013 $12,500 $3,750 *El AGI es la cantidad indicada en la línea 22 del Formulario 1040A o la línea 38 del Formulario 1040. Turbotax for military members   No tiene que presentar esta declaración escrita junto con el Formulario 1040 o Formulario 1040A, pero tiene que guardarla con su documentación. Turbotax for military members Veteranos. Turbotax for military members   Si el Departamento de Asuntos de Veteranos (VA, por sus siglas en inglés) certifica que está total y permanentemente incapacitado, puede utilizar el Formulario 21-0172 del VA, Certification of Permanent and Total Disability (Certificación de incapacidad total y permanente), en inglés, en lugar de la declaración escrita de un médico que usted está obligado a conservar. Turbotax for military members El Formulario 21-0172 del VA tiene que ser firmado por una persona autorizada por el VA. Turbotax for military members Puede obtener este formulario de la oficina regional del VA de su área. Turbotax for military members Declaración escrita de un médico obtenida en un año anterior. Turbotax for military members   Si obtuvo una declaración escrita de su médico en un año anterior y, por su condición continua de incapacidad, no pudo dedicarse a ninguna actividad sustancial remunerada durante 2013, quizás no necesite obtener otra declaración escrita de su médico para 2013. Turbotax for military members Para leer una explicación detallada de las condiciones que tiene que cumplir, consulte la Parte II de las Instrucciones del Anexo R (Formulario 1040A o 1040). Turbotax for military members Si satisface las condiciones obligatorias, marque el recuadro 2 de la Parte II del Anexo R (Formulario 1040A o 1040). Turbotax for military members   Si marcó el recuadro 4, 5 ó 6 de la Parte I del Anexo R (Formulario 1040A o 1040), anote en el espacio por encima del recuadro de la línea 2 de la Parte II el (los) primer(os) nombre(s) del (de los) cónyuge(s) para el (los) cual(es) está marcado dicho recuadro. Turbotax for military members Ingresos por incapacidad. Turbotax for military members   Si tiene menos de 65 años de edad, tiene que tener también ingresos tributables de compensación por incapacidad para reunir los requisitos del crédito. Turbotax for military members Los ingresos de compensación por incapacidad tienen que cumplir los siguientes requisitos: Se tienen que pagar conforme al seguro de accidente o médico, o el plan de pensiones de su empleador. Turbotax for military members Se tienen que incluir en los ingresos como salario (o pagos en lugar de salario) durante el tiempo por el cual se ausentó del trabajo a raíz de una incapacidad total y permanente. Turbotax for military members Pagos que no se consideran ingresos por incapacidad. Turbotax for military members   Todo pago que reciba de un plan que no ofrece una opción para la jubilación por incapacidad no se considera ingreso por incapacidad. Turbotax for military members Todo pago global que reciba por vacaciones acumuladas al jubilarse por incapacidad se considera pago de salario en vez de ingreso por incapacidad. Turbotax for military members   Para propósitos del crédito para ancianos o personas incapacitadas, los ingresos por incapacidad no incluyen cantidades que usted reciba después de cumplir la edad obligatoria de jubilación. Turbotax for military members La edad obligatoria de jubilación es la edad establecida por su empleador en la que usted habría estado obligado a jubilarse si no se hubiera quedado incapacitado. Turbotax for military members Límites sobre los Ingresos Para determinar si puede reclamar el crédito, tiene que tener en cuenta dos límites sobre los ingresos. Turbotax for military members El primer límite es la cantidad de ingresos brutos ajustados (AGI, por sus siglas en inglés). Turbotax for military members El segundo límite es la cantidad de Seguro Social no sujeta a impuestos y otras pensiones, anualidades o compensación por incapacidad no sujetas a impuestos que haya recibido. Turbotax for military members Se indican los límites en la Tabla 33-1. Turbotax for military members Si tiene ingresos brutos ajustados y pensiones, anualidades o compensación por incapacidad no sujetos a impuestos inferiores a los límites de ingresos, quizás pueda reclamar el crédito. Turbotax for military members Vea Cómo Reclamar el Crédito , más adelante. Turbotax for military members Si tiene ingresos brutos ajustados o pensiones, anualidades o compensación por incapacidad no sujetos a impuestos iguales o superiores a los límites de ingresos, no puede reclamar el crédito. Turbotax for military members Cómo Reclamar el Crédito Puede calcular el crédito usted mismo o el Servicio de Impuestos Internos (IRS, por sus siglas en inglés) se lo calculará. Turbotax for military members El Crédito Calculado por el IRS Si opta por que el IRS le calcule el crédito, lea el tema presentado a continuación relacionado con el formulario que usted va a presentar (el Formulario 1040 o el Formulario 1040A). Turbotax for military members Si desea que el IRS le calcule su impuesto, vea el capítulo 30 . Turbotax for military members Formulario 1040. Turbotax for military members   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040 bajo Impuestos Calculados por el IRS en el capítulo 30. Turbotax for military members Formulario 1040A. Turbotax for military members   Si desea que el IRS le calcule el crédito, vea Datos a Incluir en el Formulario 1040A bajo Impuestos Calculados por el IRS en el capítulo 30. Turbotax for military members El Crédito Calculado por Usted Mismo Si opta por calcular el crédito usted mismo, llene la primera página del Anexo R (Formulario 1040A o 1040). Turbotax for military members Luego, llene la Parte III del Anexo R (Formulario 1040A o 1040). Turbotax for military members Si presenta el Formulario 1040A, anote en la línea 30 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040). Turbotax for military members Si presenta el Formulario 1040, anote en la línea 53 de este formulario la cantidad proveniente de la línea 22 del Anexo R (Formulario 1040A o 1040), marque el recuadro c y escriba “Sch R” en la línea al lado de dicho recuadro. Turbotax for military members Para leer una explicación detallada sobre cómo llenar la Parte III del Anexo R, vea Figuring the Credit Yourself (Cómo calcular el crédito usted mismo), en la Publicación 524, en inglés. Turbotax for military members Límite del crédito. Turbotax for military members   La cantidad del crédito que puede reclamar, por lo general, suele limitarse a la cantidad de impuestos que tiene que pagar. Turbotax for military members Utilice la Credit Limit Worksheet (Hoja de trabajo para calcular el límite del crédito), en las Instrucciones del Anexo R (Formulario 1040A o Formulario 1040) para determinar si su crédito es limitado. Turbotax for military members Prev  Up  Next   Home   More Online Publications
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The Turbotax For Military Members

Turbotax for military members 3. Turbotax for military members   Unrelated Trade or Business Table of Contents Selling of products of exempt functions. Turbotax for military members Dual use of assets or facilities. Turbotax for military members Exploitation of exempt functions. Turbotax for military members ExamplesExceptions. Turbotax for military members Excluded Trade or Business ActivitiesQualified sponsorship payment. Turbotax for military members Advertising. Turbotax for military members Exception for contingent payments. Turbotax for military members Exception for periodicals. Turbotax for military members Exception for conventions and trade shows. Turbotax for military members Legal definition. Turbotax for military members Legal where played. Turbotax for military members No for-profit games where played. Turbotax for military members Unrelated business income. Turbotax for military members   Unrelated business income is the income from a trade or business regularly conducted by an exempt organization and not substantially related to the performance by the organization of its exempt purpose or function, except that the organization uses the profits derived from this activity. Turbotax for military members   Certain trade or business activities are not treated as an unrelated trade or business. Turbotax for military members See Excluded Trade or Business Activities, later. Turbotax for military members Trade or business. Turbotax for military members   The term “trade or business” generally includes any activity conducted for the production of income from selling goods or performing services. Turbotax for military members An activity does not lose its identity as a trade or business merely because it is conducted within a larger group of similar activities that may or may not be related to the exempt purposes of the organization. Turbotax for military members   For example, the regular sale of pharmaceutical supplies to the general public by a hospital pharmacy does not lose its identity as a trade or business, even though the pharmacy also furnishes supplies to the hospital and patients of the hospital in accordance with its exempt purpose. Turbotax for military members Similarly, soliciting, selling, and publishing commercial advertising is a trade or business even though the advertising is published in an exempt organization's periodical that contains editorial matter related to the organization's exempt purpose. Turbotax for military members Regularly conducted. Turbotax for military members   Business activities of an exempt organization ordinarily are considered regularly conducted if they show a frequency and continuity, and are pursued in a manner similar to comparable commercial activities of nonexempt organizations. Turbotax for military members   For example, a hospital auxiliary's operation of a sandwich stand for 2 weeks at a state fair would not be the regular conduct of a trade or business. Turbotax for military members The stand would not compete with similar facilities that a nonexempt organization would ordinarily operate year-round. Turbotax for military members However, operating a commercial parking lot every Saturday, year-round, would be the regular conduct of a trade or business. Turbotax for military members Not substantially related. Turbotax for military members    A business activity is not substantially related to an organization's exempt purpose if it does not contribute importantly to accomplishing that purpose (other than through the production of funds). Turbotax for military members Whether an activity contributes importantly depends in each case on the facts involved. Turbotax for military members   In determining whether activities contribute importantly to the accomplishment of an exempt purpose, the size and extent of the activities involved must be considered in relation to the nature and extent of the exempt function that they intend to serve. Turbotax for military members For example, to the extent an activity is conducted on a scale larger than is reasonably necessary to perform an exempt purpose, it does not contribute importantly to the accomplishment of the exempt purpose. Turbotax for military members The part of the activity that is more than needed to accomplish the exempt purpose is an unrelated trade or business. Turbotax for military members   Also in determining whether activities contribute importantly to the accomplishment of an exempt purpose, the following principles apply. Turbotax for military members Selling of products of exempt functions. Turbotax for military members   Ordinarily, selling products that result from the performance of exempt functions is not an unrelated trade or business if the product is sold in substantially the same state it is in when the exempt functions are completed. Turbotax for military members Thus, for an exempt organization engaged in rehabilitating handicapped persons (its exempt function), selling articles made by these persons as part of their rehabilitation training is not an unrelated trade or business. Turbotax for military members   However, if a completed product resulting from an exempt function is used or exploited in further business activity beyond what is reasonably appropriate or necessary to dispose of it as is, the activity is an unrelated trade or business. Turbotax for military members For example, if an exempt organization maintains an experimental dairy herd for scientific purposes, the sale of milk and cream produced in the ordinary course of operation of the project is not an unrelated trade or business. Turbotax for military members But if the organization uses the milk and cream in the further manufacture of food items such as ice cream, pastries, etc. Turbotax for military members , the sale of these products is an unrelated trade or business unless the manufacturing activities themselves contribute importantly to the accomplishment of an exempt purpose of the organization. Turbotax for military members Dual use of assets or facilities. Turbotax for military members   If an asset or facility necessary to the conduct of exempt functions is also used in commercial activities, its use for exempt functions does not, by itself, make the commercial activities a related trade or business. Turbotax for military members The test, as discussed earlier, is whether the activities contribute importantly to the accomplishment of exempt purposes. Turbotax for military members   For example, a museum has a theater auditorium designed for showing educational films in connection with its program of public education in the arts and sciences. Turbotax for military members The theater is a principal feature of the museum and operates continuously while the museum is open to the public. Turbotax for military members If the organization also operates the theater as a motion picture theater for the public when the museum is closed, the activity is an unrelated trade or business. Turbotax for military members   For information on allocating expenses for the dual use of assets or facilities, see Deductions in chapter 4. Turbotax for military members Exploitation of exempt functions. Turbotax for military members   Exempt activities sometimes create goodwill or other intangibles that can be exploited in a commercial way. Turbotax for military members When an organization exploits such an intangible in commercial activities, the fact that the income depends in part upon an exempt function of the organization does not make the commercial activities a related trade or business. Turbotax for military members Unless the commercial exploitation contributes importantly to the accomplishment of the exempt purpose, the commercial activities are an unrelated trade or business. Turbotax for military members   For the treatment of expenses attributable to the exploitation of exempt activities, see Deductions in chapter 4. Turbotax for military members Examples The following are examples of activities that were determined to be (or not to be) unrelated trades or businesses using the definitions and principles just discussed. Turbotax for military members Sales commissions. Turbotax for military members   An agricultural organization, whose exempt purposes are to promote better conditions for cattle breeders and to improve the breed generally, engages in an unrelated trade or business when it regularly sells cattle for its members on a commission basis. Turbotax for military members Artists' facilities. Turbotax for military members   An organization whose exempt purpose is to stimulate and foster public interest in the fine arts by promoting art exhibits, sponsoring cultural events, and furnishing information about fine arts leases studio apartments to artist tenants and operates a dining hall primarily for these tenants. Turbotax for military members These two activities do not contribute importantly to accomplishing the organization's exempt purpose. Turbotax for military members Therefore, they are unrelated trades or businesses. Turbotax for military members Membership list sales. Turbotax for military members   An exempt educational organization regularly sells membership mailing lists to business firms. Turbotax for military members This activity does not contribute importantly to the accomplishment of the organization's exempt purpose and therefore is an unrelated trade or business. Turbotax for military members Also see Exchange or rental of member lists under Excluded Trade or Business Activities, later. Turbotax for military members Hospital facilities. Turbotax for military members   An exempt hospital leases its adjacent office building and furnishes certain office services to a hospital-based medical group for a fee. Turbotax for military members The group provides all diagnostic and therapeutic procedures to the hospital's patients and operates the hospital's emergency room on a 24-hour basis. Turbotax for military members The leasing activity is substantially related to the hospital's exempt purpose and is not an unrelated trade or business. Turbotax for military members   The hospital also operates a gift shop patronized by patients, visitors making purchases for patients, and employees; a cafeteria and coffee shop primarily for employees and medical staff; and a parking lot for patients and visitors only. Turbotax for military members These activities are also substantially related to the hospital's exempt purpose and do not constitute unrelated trades or businesses. Turbotax for military members Book publishing. Turbotax for military members   An exempt organization engages primarily in activities that further its exempt purposes. Turbotax for military members It also owns the publication rights to a book that does not relate to any of its exempt purposes. Turbotax for military members The organization exploits the book in a commercial manner by arranging for printing, distribution, publicity, and advertising in connection with the sale of the book. Turbotax for military members These activities constitute a trade or business regularly conducted. Turbotax for military members Because exploiting the book is unrelated to the organization's exempt purposes (except for the use of the book's profits), the income is unrelated business income. Turbotax for military members   However, if the organization transfers publication rights to a commercial publisher in return for royalties, the royalty income received will not be unrelated business income. Turbotax for military members See Royalties under Exclusions in chapter 4. Turbotax for military members School handicraft shop. Turbotax for military members   An exempt vocational school operates a handicraft shop that sells articles made by students in their regular courses of instruction. Turbotax for military members The students are paid a percentage of the sales price. Turbotax for military members In addition, the shop sells products made by local residents who make articles at home according to the shop's specifications. Turbotax for military members The shop manager periodically inspects the articles during their manufacture to ensure that they meet desired standards of style and quality. Turbotax for military members Although many local participants are former students of the school, any qualified person may participate in the program. Turbotax for military members The sale of articles made by students does not constitute an unrelated trade or business, but the sale of products made by local residents is an unrelated trade or business and is subject to unrelated business income tax. Turbotax for military members School facilities. Turbotax for military members   An exempt school has tennis courts and dressing rooms that it uses during the regular school year in its educational program. Turbotax for military members During the summer, the school operates a tennis club open to the general public. Turbotax for military members Employees of the school run the club, including collecting membership fees and scheduling court time. Turbotax for military members   Another exempt school leases the same type of facilities to an unrelated individual who runs a tennis club for the summer. Turbotax for military members The lease is for a fixed fee that does not depend on the income or profits derived from the leased property. Turbotax for military members   In both situations, the exempt purpose is the advancement of education. Turbotax for military members Furnishing tennis facilities in the manner described does not further that exempt purpose. Turbotax for military members These activities are unrelated trades or businesses. Turbotax for military members However, in the second situation the income derived from the leasing of the property is excluded from unrelated business taxable income as rent from real property. Turbotax for military members See Rents under Exclusions in chapter 4. Turbotax for military members Services provided with lease. Turbotax for military members   An exempt university leases its football stadium during several months of the year to a professional football team for a fixed fee. Turbotax for military members Under the lease agreement, the university furnishes heat, light, and water and is responsible for all ground maintenance. Turbotax for military members It also provides dressing room, linen, and stadium security services for the professional team. Turbotax for military members   Leasing of the stadium is an unrelated trade or business. Turbotax for military members In addition, the substantial services furnished for the convenience of the lessee go beyond those usually provided with the rental of space for occupancy only. Turbotax for military members Therefore, the income from this lease is rent from real property and unrelated business taxable income. Turbotax for military members Broadcasting rights. Turbotax for military members   An exempt collegiate athletic conference conducts an annual competitive athletic game between its conference champion and another collegiate team. Turbotax for military members Income is derived from admission charges and the sale of exclusive broadcasting rights to a national radio and television network. Turbotax for military members An athletic program is considered an integral part of the educational process of a university. Turbotax for military members   The educational purposes served by intercollegiate athletics are identical whether conducted directly by individual universities or by their regional athletic conference. Turbotax for military members Also, the educational purposes served by exhibiting a game before an audience that is physically present and exhibiting the game on television or radio before a much larger audience are substantially similar. Turbotax for military members Therefore, the sale of the broadcasting rights contributes importantly to the accomplishment of the organization's exempt purpose and is not an unrelated trade or business. Turbotax for military members   In a similar situation, an exempt organization was created as a national governing body for amateur athletes to foster interest in amateur sports and to encourage widespread public participation. Turbotax for military members The organization receives income each year from the sale of exclusive broadcasting rights to an independent producer, who contracts with a commercial network to broadcast many of the athletic events sponsored, supervised, and regulated by the organization. Turbotax for military members   The broadcasting of these events promotes the various amateur sports, fosters widespread public interest in the benefits of the organization's nationwide amateur program, and encourages public participation. Turbotax for military members The sale of the rights and the broadcasting of the events contribute importantly to the organization's exempt purpose. Turbotax for military members Therefore, the sale of the exclusive broadcasting rights is not an unrelated trade or business. Turbotax for military members Yearbook advertising. Turbotax for military members   An exempt organization receives income from the sale of advertising in its annual yearbook. Turbotax for military members The organization hires an independent commercial firm, under a contract covering a full calendar year, to conduct an intensive advertising solicitation campaign in the organization's name. Turbotax for military members This firm is paid a percentage of the gross advertising receipts for selling the advertising, collecting from advertisers, and printing the yearbook. Turbotax for military members This advertising activity is an unrelated trade or business. Turbotax for military members Pet boarding and grooming services. Turbotax for military members   An exempt organization, organized and operated for the prevention of cruelty to animals, receives unrelated business income from providing pet boarding and grooming services for the general public. Turbotax for military members These activities do not contribute importantly to its purpose of preventing cruelty to animals. Turbotax for military members Museum eating facilities. Turbotax for military members   An exempt art museum operates a dining room, a cafeteria, and a snack bar for use by the museum staff, employees, and visitors. Turbotax for military members Eating facilities in the museum help to attract visitors and allow them to spend more time viewing the museum's exhibits without having to seek outside restaurants at mealtime. Turbotax for military members The eating facilities also allow the museum staff and employees to remain in the museum throughout the day. Turbotax for military members Thus, the museum's operation of the eating facilities contributes importantly to the accomplishment of its exempt purposes and is not unrelated trade or business. Turbotax for military members Halfway house workshop. Turbotax for military members   A halfway house organized to provide room, board, therapy, and counseling for persons discharged from alcoholic treatment centers also operates a furniture shop to provide full-time employment for its residents. Turbotax for military members The profits are applied to the operating costs of the halfway house. Turbotax for military members The income from this venture is not unrelated trade or business income because the furniture shop contributes importantly to the organization's purpose of aiding its residents' transition from treatment to a normal and productive life. Turbotax for military members Travel tour programs. Turbotax for military members   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose for which tax exemption was granted to the organization. Turbotax for military members Example 1. Turbotax for military members A tax-exempt university alumni association provides a travel tour program for its members and their families. Turbotax for military members The organization works with various travel agencies and schedules approximately ten tours a year to various places around the world. Turbotax for military members It mails out promotional material and accepts reservations for fees paid by the travel agencies on a per-person basis. Turbotax for military members The organization provides an employee for each tour as a tour leader. Turbotax for military members There is no formal educational program conducted with these tours, and they do not differ from regular commercially operated tours. Turbotax for military members By providing travel tours to its members, the organization is engaging in a regularly conducted trade or business. Turbotax for military members Even if the tours it offers support the university, financially and otherwise, and encourage alumni to do the same, they do not contribute importantly to the organization's exempt purpose of promoting education. Turbotax for military members Therefore, the sale of the travel tours is an unrelated trade or business. Turbotax for military members Example 2. Turbotax for military members A tax-exempt organization formed for the purpose of educating individuals about the geography and the culture of the United States provides study tours to national parks and other locations within the United States. Turbotax for military members These tours are conducted by teachers and others certified by the state board of education. Turbotax for military members The tours are primarily designed for students enrolled in degree programs at state educational institutions but are open to all who agree to participate in the required study program associated with the tour taken. Turbotax for military members A tour's study program consists of instruction on subjects related to the location being visited on the tour. Turbotax for military members Each tour group brings along a library of material related to the subjects being studied on the tour. Turbotax for military members During the tour, 5 or 6 hours per day are devoted to organized study, preparation of reports, lectures, instruction, and recitation by the students. Turbotax for military members Examinations are given at the end of each tour. Turbotax for military members The state board of education awards academic credit for tour participation. Turbotax for military members Because these tours are substantially related to the organization's exempt purpose, they are not an unrelated trade or business. Turbotax for military members Insurance programs. Turbotax for military members   An organization that acts as a group insurance policyholder for its members and collects a fee for performing administrative services is normally carrying on an unrelated trade or business. Turbotax for military members Exceptions. Turbotax for military members   Organizations whose exempt activities may include the provision of insurance benefits, such as fraternal beneficiary societies, voluntary employees beneficiary associations, and labor organizations, are generally exceptions to this rule. Turbotax for military members Magazine publishing. Turbotax for military members   An association of credit unions with tax-exempt status as a business league publishes a consumer-oriented magazine four times a year and makes it available to member credit unions for purchase. Turbotax for military members   By selling a magazine to its members as a promotional device, the organization furnishes its members with a regular commercial service they can use in their own operations. Turbotax for military members This service does not promote the improvement of business conditions of one or more lines of business, which is the exempt purpose of a business league. Turbotax for military members   Since the activity does not contribute importantly to the organization's exempt function, it is an unrelated trade or business. Turbotax for military members Directory of members. Turbotax for military members   A business league publishes an annual directory that contains a list of all its members, their addresses, and their area of expertise. Turbotax for military members Each member has the same amount of space in the directory, and its format does not emphasize the relative importance or reputation of any member. Turbotax for military members The directory contains no commercial advertisement and is sold only to the organization's members. Turbotax for military members   The directory facilitates communication among the members and encourages the exchange of ideas and expertise. Turbotax for military members Because the directory lists the members in a similar noncommercial format without advertising and is not distributed to the public, its sale does not confer private commercial benefits on the members. Turbotax for military members The sale of the directory does contribute importantly to the organization's exempt purpose and is not an unrelated trade or business. Turbotax for military members This directory differs from the publication discussed next because of its noncommercial characteristics. Turbotax for military members Sales of advertising space. Turbotax for military members   A national association of law enforcement officials publishes a monthly journal that contains articles and other editorial material of professional interest to its members. Turbotax for military members The journal is distributed without charge, mainly to the organization's members. Turbotax for military members   The organization sells advertising space in the journal either for conventional advertising or to merely identify the purchaser without a commercial message. Turbotax for military members Some of the noncommercial advertising identifies the purchaser in a separate space, and some consists of listings of 60 or more purchasers per page. Turbotax for military members A business firm identified in a separate space is further identified in an Index of Advertisers. Turbotax for military members   The organization solicits advertising by personal contacts. Turbotax for military members Advertising from large firms is solicited by contacting their chief executive officer or community relations officer rather than their advertising manager. Turbotax for military members The organization also solicits advertising in form letters appealing for corporate and personal contributions. Turbotax for military members   An exempt organization's sale of advertising placed for the purchaser's commercial benefit is a commercial activity. Turbotax for military members Goodwill derived by the purchaser from being identified as a patron of the organization is usually considered a form of commercial benefit. Turbotax for military members Therefore, advertising in an exempt organization's publication is generally presumed to be placed for the purchaser's commercial benefit, even if it has no commercial message. Turbotax for military members However, this presumption is not conclusive if the purchaser's patronage would be difficult to justify commercially in view of the facts and circumstances. Turbotax for military members In that case, other factors should also be considered in determining whether a commercial benefit can be expected. Turbotax for military members Those other factors include: The normal manner in which the publication is circulated; The territorial scope of the circulation; The extent to which its readers, promoters, or the like could reasonably be expected to further, either directly or indirectly, the commercial interest of the advertisers; The eligibility of the publishing organization to receive tax-deductible contributions; and The commercial or noncommercial methods used to solicit the advertisers. Turbotax for military members   In this situation, the purchaser of a separate advertising space without a commercial message can nevertheless expect a commercial benefit from the goodwill derived from being identified in that manner as a patron of the organization. Turbotax for military members However, the purchaser of a listing cannot expect more than an inconsequential benefit. Turbotax for military members Therefore, the sale of separate spaces, but not the listings, is an unrelated trade or business. Turbotax for military members Publishing legal notices. Turbotax for military members   A bar association publishes a legal journal containing opinions of the county court, articles of professional interest to lawyers, advertisements for products and services used by the legal profession, and legal notices. Turbotax for military members The legal notices are published to satisfy state laws requiring publication of notices in connection with legal proceedings, such as the administration of estates and actions to quiet title to real property. Turbotax for military members The state designated the bar association's journal as the place to publish the required notices. Turbotax for military members   The publication of ordinary commercial advertising does not advance the exempt purposes of the association even when published in a periodical that contains material related to exempt purposes. Turbotax for military members Although the advertising is directed specifically to members of the legal profession, it is still commercial in nature and does not contribute importantly to the exempt purposes of the association. Turbotax for military members Therefore, the advertising income is unrelated trade or business income. Turbotax for military members   On the other hand, the publication of legal notices is distinguishable from ordinary commercial advertising in that its purpose is to inform the general public of significant legal events rather than to stimulate demand for the products or services of an advertiser. Turbotax for military members This promotes the common interests of the legal profession and contributes importantly to the association's exempt purposes. Turbotax for military members Therefore, the publishing of legal notices does not constitute an unrelated trade or business. Turbotax for military members Museum greeting card sales. Turbotax for military members    An art museum that exhibits modern art sells greeting cards that display printed reproductions of selected works from other art collections. Turbotax for military members Each card is imprinted with the name of the artist, the title or subject matter of the work, the date or period of its creation, if known, and the museum's name. Turbotax for military members The cards contain appropriate greetings and are personalized on request. Turbotax for military members   The organization sells the cards in the shop it operates in the museum and sells them at quantity discounts to retail stores. Turbotax for military members It also sells them by mail order through a catalog that is advertised in magazines and other publications throughout the year. Turbotax for military members As a result, a large number of cards are sold at a significant profit. Turbotax for military members   The museum is exempt as an educational organization on the basis of its ownership, maintenance, and exhibition for public viewing of works of art. Turbotax for military members The sale of greeting cards with printed reproductions of artworks contributes importantly to the achievement of the museum's exempt educational purposes by enhancing public awareness, interest, and appreciation of art. Turbotax for military members The cards may encourage more people to visit the museum itself to share in its educational programs. Turbotax for military members The fact that the cards are promoted and sold in a commercial manner at a profit and in competition with commercial greeting card publishers does not alter the fact that the activity is related to the museum's exempt purpose. Turbotax for military members Therefore, these sales activities are not an unrelated trade or business. Turbotax for military members Museum shop. Turbotax for military members   An art museum maintained and operated for the exhibition of American folk art operates a shop in the museum that sells: Reproductions of works in the museum's own collection and reproductions of artistic works from the collections of other art museums (prints suitable for framing, postcards, greeting cards, and slides); Metal, wood, and ceramic copies of American folk art objects from its own collection and similar copies of art objects from other collections of artworks; Instructional literature and scientific books and souvenir items concerning the history and development of art and, in particular, of American folk art; and Scientific books and souvenir items of the city in which the museum is located. Turbotax for military members   The shop also rents originals or reproductions of paintings contained in its collection. Turbotax for military members All of its reproductions are imprinted with the name of the artist, the title or subject matter of the work from which it is reproduced, and the museum's name. Turbotax for military members   Each line of merchandise must be considered separately to determine if sales are related to the exempt purpose. Turbotax for military members   The sale and rental of reproductions and copies of works from the museum's own collection and reproductions of artistic works not owned by the museum contribute importantly to the achievement of the museum's exempt educational purpose by making works of art familiar to a broader segment of the public, thereby enhancing the public's understanding and appreciation of art. Turbotax for military members The same is true for the sale of literature relating to art. Turbotax for military members Therefore, these sales activities are not an unrelated trade or business. Turbotax for military members   On the other hand, the sale of scientific books and souvenir items of the city where the museum is located has no causal relationship to art or to artistic endeavor and, therefore, does not contribute importantly to the accomplishment of the museum's exempt educational purposes. Turbotax for military members The fact that selling some of these items could, under different circumstances, be held related to the exempt educational purpose of some other exempt educational organization does not change this conclusion. Turbotax for military members Additionally, the sale of these items does not lose its identity as a trade or business merely because the museum also sells articles which do contribute importantly to the accomplishment of its exempt function. Turbotax for military members Therefore, these sales are an unrelated trade or business. Turbotax for military members Business league's parking and bus services. Turbotax for military members   A business league, whose purpose is to retain and stimulate trade in a downtown area that has inadequate parking facilities, operates a fringe parking lot and shuttle bus service. Turbotax for military members It also operates, as an insubstantial part of its activities, a park and shop plan. Turbotax for military members   The fringe parking lot and shuttle bus service operate in a manner that does not favor any individual or group of downtown merchants. Turbotax for military members The merchants cannot offer free or discount parking or bus fares to their customers. Turbotax for military members   The park and shop plan allows customers of particular merchants to park free at certain parking lots in the area. Turbotax for military members Merchants participating in this plan buy parking stamps, which they distribute to their customers to use to pay for parking. Turbotax for military members   Operating the fringe parking lot and shuttle bus service provides easy and convenient access to the downtown area and, therefore, stimulates and improves business conditions in the downtown area generally. Turbotax for military members That activity contributes importantly to the organization's accomplishing its exempt purpose and is not an unrelated trade or business. Turbotax for military members   The park and shop plan encourages customers to use a limited number of participating member merchants in order to obtain free parking. Turbotax for military members This provides a particular service to individual members of the organization and does not further its exempt purpose. Turbotax for military members Therefore, operating the park and shop plan is an unrelated trade or business. Turbotax for military members Youth residence. Turbotax for military members   An exempt organization, whose purpose is to provide for the welfare of young people, rents rooms primarily to people under age 25. Turbotax for military members The residence units are operated on, and as a part of, the premises in which the organization carries on the social, recreational, and guidance programs for which it was recognized as exempt. Turbotax for military members The facilities are under the management and supervision of trained career professionals who provide residents with personal counseling, physical education programs, and group recreational activities. Turbotax for military members The rentals are not an unrelated trade or business because renting the rooms is substantially related to the organization's exempt purpose. Turbotax for military members Health club program. Turbotax for military members   An exempt charitable organization's purpose is to provide for the welfare of young people. Turbotax for military members The organization conducts charitable activities and maintains facilities that will contribute to the physical, social, mental, and spiritual health of young people at minimum or no cost to them. Turbotax for military members Nominal annual dues are charged for membership in the organization and use of the facilities. Turbotax for military members   In addition, the organization organized a health club program that its members could join for an annual fee in addition to the annual dues. Turbotax for military members The annual fee is comparable to fees charged by similar local commercial health clubs and is sufficiently high to restrict participation in the program to a limited number of members of the community. Turbotax for military members   The health club program is in addition to the general physical fitness program of the organization. Turbotax for military members Operating this program does not contribute importantly to the organization's accomplishing its exempt purpose and, therefore, is an unrelated trade or business. Turbotax for military members Miniature golf course. Turbotax for military members   An exempt youth welfare organization operates a miniature golf course that is open to the general public. Turbotax for military members The course, which is managed by salaried employees, is substantially similar to commercial courses. Turbotax for military members The admission fees charged are comparable to fees of commercial facilities and are designed to return a profit. Turbotax for military members   The operation of the miniature golf course in a commercial manner does not contribute importantly to the accomplishment of the organization's exempt purpose and, therefore, is an unrelated trade or business. Turbotax for military members Sales of hearing aids. Turbotax for military members   A tax-exempt hospital, whose primary activity is rehabilitation, sells hearing aids to patients. Turbotax for military members This activity is an essential part of the hospital's program to test and evaluate patients with hearing deficiencies and contributes importantly to its exempt purpose. Turbotax for military members It is not an unrelated trade or business. Turbotax for military members Nonpatient laboratory testing. Turbotax for military members   Nonpatient laboratory testing performed by a tax-exempt teaching hospital on specimens needed for the conduct of its teaching activities is not an unrelated trade or business. Turbotax for military members However, laboratory testing performed by a tax-exempt non-teaching hospital on referred specimens from private office patients of staff physicians is an unrelated trade or business if these services are otherwise available in the community. Turbotax for military members Selling endorsements. Turbotax for military members   An exempt scientific organization enjoys an excellent reputation in the field of biological research. Turbotax for military members It exploits this reputation regularly by selling endorsements of laboratory equipment to manufacturers. Turbotax for military members Endorsing laboratory equipment does not contribute importantly to the accomplishment of any purpose for which exemption is granted to the organization. Turbotax for military members Accordingly, the sale of endorsements is an unrelated trade or business. Turbotax for military members Sponsoring entertainment events. Turbotax for military members   An exempt university has a regular faculty and a regularly enrolled student body. Turbotax for military members During the school year, the university sponsors the appearance of professional theater companies and symphony orchestras that present drama and musical performances for the students and faculty members. Turbotax for military members Members of the general public also are admitted. Turbotax for military members The university advertises these performances and supervises advance ticket sales at various places, including such university facilities as the cafeteria and the university bookstore. Turbotax for military members Although the presentation of the performances makes use of an intangible generated by the university's exempt educational functions—the presence of the student body and faculty—such drama and music events contribute importantly to the overall educational and cultural functions of the university. Turbotax for military members Therefore, the activity is not an unrelated trade or business. Turbotax for military members Excluded Trade or Business Activities The following activities are specifically excluded from the definition of unrelated trade or business. Turbotax for military members Volunteer workforce. Turbotax for military members   Any trade or business in which substantially all the work is performed for the organization without compensation is not an unrelated trade or business. Turbotax for military members Example 1. Turbotax for military members A retail store operated by an exempt orphanage where unpaid volunteers perform substantially all the work in carrying on the business is not an unrelated trade or business. Turbotax for military members Example 2. Turbotax for military members A volunteer fire company conducts weekly public dances. Turbotax for military members Holding public dances and charging admission on a regular basis may, given the facts and circumstances of a particular case, be considered an unrelated trade or business. Turbotax for military members However, because the work at the dances is performed by unpaid volunteers, the activity is not an unrelated trade or business. Turbotax for military members Convenience of members. Turbotax for military members   A trade or business conducted by a 501(c)(3) organization or by a governmental college or university primarily for the convenience of its members, students, patients, officers, or employees is not an unrelated trade or business. Turbotax for military members For example, a laundry operated by a college for the purpose of laundering dormitory linens and students' clothing is not an unrelated trade or business. Turbotax for military members Qualified sponsorship activities. Turbotax for military members   Soliciting and receiving qualified sponsorship payments is not an unrelated trade or business, and the payments are not subject to unrelated business income tax. Turbotax for military members Qualified sponsorship payment. Turbotax for military members   This is any payment made by a person engaged in a trade or business for which the person will receive no substantial benefit other than the use or acknowledgment of the business name, logo, or product lines in connection with the organization's activities. Turbotax for military members “Use or acknowledgment” does not include advertising the sponsor's products or services. Turbotax for military members The organization's activities include all its activities, whether or not related to its exempt purposes. Turbotax for military members   For example, if, in return for receiving a sponsorship payment, an organization promises to use the sponsor's name or logo in acknowledging the sponsor's support for an educational or fundraising event, the payment is a qualified sponsorship payment and is not subject to the unrelated business income tax. Turbotax for military members   Providing facilities, services, or other privileges (for example, complimentary tickets, pro-am playing spots in golf tournaments, or receptions for major donors) to a sponsor or the sponsor's designees in connection with a sponsorship payment does not affect whether the payment is a qualified sponsorship payment. Turbotax for military members Instead, providing these goods or services is treated as a separate transaction in determining whether the organization has unrelated business income from the event. Turbotax for military members Generally, if the services or facilities are not a substantial benefit or if providing them is a related business activity, the payments will not be subject to the unrelated business income tax. Turbotax for military members   Similarly, the sponsor's receipt of a license to use an intangible asset (for example, a trademark, logo, or designation) of the organization is treated as separate from the qualified sponsorship transaction in determining whether the organization has unrelated business taxable income. Turbotax for military members   If part of a payment would be a qualified sponsorship payment if paid separately, that part is treated as a separate payment. Turbotax for military members For example, if a sponsorship payment entitles the sponsor to both product advertising and the use or acknowledgment of the sponsor's name or logo by the organization, then the unrelated business income tax does not apply to the part of the payment that is more than the fair market value of the product advertising. Turbotax for military members Advertising. Turbotax for military members   A payment is not a qualified sponsorship payment if, in return, the organization advertises the sponsor's products or services. Turbotax for military members For information on the treatment of payments for advertising, see Exploitation of Exempt Activity—Advertising Sales in chapter 4. Turbotax for military members   Advertising includes: Messages containing qualitative or comparative language, price information, or other indications of savings or value; Endorsements; and Inducements to purchase, sell, or use the products or services. Turbotax for military members   The use of promotional logos or slogans that are an established part of the sponsor's identity is not, by itself, advertising. Turbotax for military members In addition, mere distribution or display of a sponsor's product by the organization to the public at a sponsored event, whether for free or for remuneration, is considered use or acknowledgment of the product rather than advertising. Turbotax for military members Exception for contingent payments. Turbotax for military members   A payment is not a qualified sponsorship payment if its amount is contingent, by contract or otherwise, upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events. Turbotax for military members However, the fact that a sponsorship payment is contingent upon an event actually taking place or being broadcast does not, by itself, affect whether a payment qualifies. Turbotax for military members Exception for periodicals. Turbotax for military members   A payment is not a qualified sponsorship payment if it entitles the payer to the use or acknowledgment of the business name, logo, or product lines in the organization's periodical. Turbotax for military members For this purpose, a periodical is any regularly scheduled and printed material (for example, a monthly journal) published by or on behalf of the organization. Turbotax for military members It does not include material that is related to and primarily distributed in connection with a specific event conducted by the organization (for example, a program or brochure distributed at a sponsored event). Turbotax for military members   The treatment of payments that entitle the payer to the depiction of the payer's name, logo, or products lines in an organization's periodical is determined under the rules that apply to advertising activities. Turbotax for military members See Sales of advertising space under Examples, earlier in this chapter. Turbotax for military members Also see Exploitation of Exempt Activity—Advertising Sales in chapter 4. Turbotax for military members Exception for conventions and trade shows. Turbotax for military members   A payment is not a qualified sponsorship payment if it is made in connection with any qualified convention or trade show activity. Turbotax for military members The exclusion of qualified convention or trade show activities from the definition of unrelated trade or business is explained later under Convention or trade show activity. Turbotax for military members Selling donated merchandise. Turbotax for military members   A trade or business that consists of selling merchandise, substantially all of which the organization received as gifts or contributions, is not an unrelated trade or business. Turbotax for military members For example, a thrift shop operated by a tax-exempt organization that sells donated clothes and books to the general public, with the proceeds going to the exempt organization, is not an unrelated trade or business. Turbotax for military members Employee association sales. Turbotax for military members   The sale of certain items by a local association of employees described in section 501(c)(4), organized before May 17, 1969, is not an unrelated trade or business if the items are sold for the convenience of the association's members at their usual place of employment. Turbotax for military members This exclusion applies only to the sale of work-related clothes and equipment and items normally sold through vending machines, food dispensing facilities, or by snack bars. Turbotax for military members Bingo games. Turbotax for military members   Certain bingo games are not included in the term “unrelated trade or business. Turbotax for military members ” To qualify for this exclusion, the bingo game must meet the following requirements. Turbotax for military members It meets the legal definition of bingo. Turbotax for military members It is legal where it is played. Turbotax for military members It is played in a jurisdiction where bingo games are not regularly conducted by for-profit organizations. Turbotax for military members Legal definition. Turbotax for military members   For a game to meet the legal definition of bingo, wagers must be placed, winners must be determined, and prizes or other property must be distributed in the presence of all persons placing wagers in that game. Turbotax for military members   A wagering game that does not meet the legal definition of bingo does not qualify for the exclusion, regardless of its name. Turbotax for military members For example, “instant bingo,” in which a player buys a pre-packaged bingo card with pull-tabs that the player removes to determine if he or she is a winner, does not qualify. Turbotax for military members Legal where played. Turbotax for military members   This exclusion applies only if bingo is legal under the laws of the jurisdiction where it is conducted. Turbotax for military members The fact that a jurisdiction's law that prohibits bingo is rarely enforced or is widely disregarded does not make the conduct of bingo legal for this purpose. Turbotax for military members No for-profit games where played. Turbotax for military members   This exclusion applies only if for-profit organizations cannot regularly conduct bingo games in any part of the same jurisdiction. Turbotax for military members Jurisdiction is normally the entire state; however, in certain situations, local jurisdiction will control. Turbotax for military members Example. Turbotax for military members Tax-exempt organizations X and Y are organized under the laws of state N, which has a law that permits exempt organizations to conduct bingo games. Turbotax for military members In addition, for-profit organizations are permitted to conduct bingo games in city S, a resort community located in county R. Turbotax for military members Several for-profit organizations conduct nightly games. Turbotax for military members Y conducts weekly bingo games in city S, while X conducts weekly games in county R. Turbotax for military members Since state law confines the for-profit organizations to city S, local jurisdiction controls. Turbotax for military members Y's bingo games conducted in city S are an unrelated trade or business. Turbotax for military members However, X's bingo games conducted in county R outside of city S are not an unrelated trade or business. Turbotax for military members Gambling activities other than bingo. Turbotax for military members   Any game of chance conducted by an exempt organization in North Dakota is not an unrelated trade or business if conducting the game does not violate any state or local law. Turbotax for military members Pole rentals. Turbotax for military members   The term unrelated trade or business does not include qualified pole rentals by a mutual or cooperative telephone or electric company described in section 501(c)(12). Turbotax for military members A qualified pole rental is the rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that the company uses in providing telephone or electric services to its members, and According to the rental, to support one or more wires (in addition to the wires described in 1 ) for use in connection with the transmission by wire of electricity or of telephone or other communications. Turbotax for military members For this purpose, the term rental includes any sale of the right to use the pole (or other structure). Turbotax for military members Distribution of low cost articles. Turbotax for military members   The term unrelated trade or business does not include activities relating to the distribution of low cost articles incidental to soliciting charitable contributions. Turbotax for military members This applies to organizations described in section 501 that are eligible to receive charitable contributions. Turbotax for military members   A distribution is considered incidental to the solicitation of a charitable contribution if: The recipient did not request the distribution, The distribution is made without the express consent of the recipient, and The article is accompanied by a request for a charitable contribution to the organization and a statement that the recipient may keep the low cost article regardless of whether a contribution is made. Turbotax for military members   An article is considered low cost if the cost of an item (or the aggregate costs if more than one item) distributed to a single recipient in a tax year is not more than $5, indexed annually for inflation. Turbotax for military members The maximum cost of a low cost article is $9. Turbotax for military members 70 for 2011. Turbotax for military members The cost of an article is the cost to the organization that distributes the item or on whose behalf it is distributed. Turbotax for military members Exchange or rental of member lists. Turbotax for military members   The exchange or rental of member or donor lists between organizations described in section 501 that are eligible to receive charitable contributions is not included in the term unrelated trade or business. Turbotax for military members Hospital services. Turbotax for military members   The providing of certain services at or below cost by an exempt hospital to other exempt hospitals that have facilities for 100 or fewer inpatients is not an unrelated trade or business. Turbotax for military members This exclusion applies only to services described in section 501(e)(1)(A). Turbotax for military members Public entertainment activity. Turbotax for military members   An unrelated trade or business does not include a qualified public entertainment activity. Turbotax for military members A public entertainment activity is one traditionally conducted at a fair or exposition promoting agriculture and education, including any activity whose purpose is designed to attract the public to fairs or expositions or to promote the breeding of animals or the development of products or equipment. Turbotax for military members   A qualified public entertainment activity is one conducted by a qualifying organization: In conjunction with an international, national, state, regional, or local fair or exposition; In accordance with state law that permits the activity to be operated or conducted solely by such an organization or by an agency, instrumentality, or political subdivision of the state; or In accordance with state law that permits an organization to be granted a license to conduct an activity for not more than 20 days on paying the state a lower percentage of the revenue from the activity than the state charges nonqualifying organizations that hold similar activities. Turbotax for military members   For these purposes, a qualifying organization is an organization described in section 501(c)(3), 501(c)(4), or 501(c)(5) that regularly conducts an agricultural and educational fair or exposition as one of its substantial exempt purposes. Turbotax for military members Its conducting qualified public entertainment activities will not affect determination of its exempt status. Turbotax for military members Convention or trade show activity. Turbotax for military members   An unrelated trade or business does not include qualified convention or trade show activities conducted at a convention, annual meeting, or trade show. Turbotax for military members   A qualified convention or trade show activity is any activity of a kind traditionally conducted by a qualifying organization in conjunction with an international, national, state, regional, or local convention, annual meeting, or show if: One of the purposes of the organization in sponsoring the activity is promoting and stimulating interest in, and demand for, the products and services of that industry or educating the persons in attendance regarding new products and services or new rules and regulations affecting the industry; and The show is designed to achieve its purpose through the character of the exhibits and the extent of the industry products that are displayed. Turbotax for military members   For these purposes, a qualifying organization is one described in section 501(c)(3), 501(c)(4), 501(c)(5), or 501(c)(6). Turbotax for military members The organization must regularly conduct, as one of its substantial exempt purposes, a qualified convention or trade show activity. Turbotax for military members   The rental of display space to exhibitors (including exhibitors who are suppliers) at a qualified convention or trade show is not an unrelated trade or business even if the exhibitors who rent the space are permitted to sell or solicit orders. Turbotax for military members For this purpose, a supplier's exhibit is one in which the exhibitor displays goods or services that are supplied to, rather than by, members of the qualifying organization in the conduct of these members' own trades or businesses. Turbotax for military members    Certain Internet activities conducted by a trade association described in section 501(c)(6) will be considered qualified convention and trade show activity if conducted on a special supplementary section of the association's website in conjunction with a trade show conducted by the association. Turbotax for military members The trade show itself must be a qualified convention and trade show activity. Turbotax for military members The supplementary section of the website must be ancillary to, and serve to augment and enhance, the trade show, as when it makes available the same information available at the trade show and is available only during a time period that coincides with the time period that the trade show is in operation. Turbotax for military members Conversely, Internet activities that are not conducted in conjunction with a qualified convention and trade show activity and that do not augment and enhance the trade show cannot themselves be qualified convention and trade show activity. Turbotax for military members Prev  Up  Next   Home   More Online Publications