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Does a Non-Profit 501(c)(3) Realize Unrelated Business Taxable Income (UBTI) For Advertising?

Non-profit organizations which are exempt from income tax under 501(a) are subject to tax on unrelated business income. 501(b), 511. Unrelated business income is gross income derived by any organization from any unrelated trade or business, regularly carried on by it, less the deductions allowed. 512. An unrelated trade or business is a trade or business which is not substantially related (aside from the need of such organization for income or funds) to the purpose of the organization. 513. However, unrelated trade or business does not include a trade or business where substantially all the work is performed for the organization without compensation. 513(a)(1). See Rev. Rul. 75-201, 1975-1 CB 164.

The sale of advertising in a publication published by an exempt organization is an unrelated trade or business when the advertising activity is regularly carried on. Reg. 1.512(a)-1(f)(1). See also Rev. Rul. 73-424, 1973-2 CB 190.

Courts have held advertising revenue not to constitute unrelated business income in some circumstances. For example, in National Collegiate Athletic Assn. V. Comm., (1990, CA10) 66 AFTR 2d 90-5602, 914 F.2d 1417, 90-2USTC 50513, revg (1989) 92 TC 456, advertising revenue received by the NCAA from the sale of programs of its annually sponsored championship tournament was not unrelated business income where the tournament lasted less than three weeks and occurred only once a year.

IRS Chief Counsel strongly disagrees with the Tenth circuit. The IRS argues the state court should have taken into account the time spent soliciting the advertisements and preparing the advertising for publication. IRS announced it will continue to litigate the issue in appropriate cases. Action on Decision 1991-015, 7/3/91.

IRS distinguished NCAA where a state university received income from advertising placed in its football souvenir programs. Here, a significant time span was involved over which the activities were conducted. The football season lasted three months and the work in setting up the programs and soliciting adverting took even longer. IRS letter ruling 9137002.

Assuming that the journal is published periodically throughout the year, an exempt organization should not rely on National Collegiate Athletic Assn. The periodic publishing and on going solicitation efforts will likely constitute a unrelated business regularly carried on. See 512.

The court also held advertising revenue does not constitute unrelated business income in US v. American College of Physicians, (1986 S.Ct). In American College of Physicians, the court found that the advertising business contributes importantly to the universitys education program through the training of students.

Also, advertising revenue does not constitute unrelated business income if the advertising contributes to the organizations purpose. For example, publication of legal notices in a bar association journal contributes to the associations exempt purposes by promoting the common interest of the legal profession through providing a single source of information regarding legal events in the county and therefore, wouldnt result in unrelated business income. Rev. Rul. 82-139, 1982-2 CB 108. However, advertising revenue received by a bar association for ads place in its attorney directory are taxable income since the advertising is commercial in nature and represents an effort on the part of advertisers to maximize sales to a certain segment of the public. IRS Letter Ruling 9148054.

Similarly, magazine advertising revenues received by an exempt trucking association did not contribute to the associations exempt purposes where the advertising represented marketing efforts by the advertisers to sell their product. In this case, no systematic effort was made by the organization to advertise products related to the editorial content and no effort was made by the organization to limit advertisements to new products. Florida Trucking Assn Inc. (1986) 87 TC 1039.

It is clear that, with a few exceptions, advertising revenues received by a 501(c)(3) exempt organization will often generate unrelated business taxable income (UBTI).

posted by aasdas38493 @ 11:15 PM 0 comments

Sport

In our modern day society we have moved away from walking anywhere and think nothing of jumping into the car for a quick trip to the corner shop. We live life at such a fast pace that we feel we dont have time to walk anywhere and as a result we are probably the most unfit that we have ever been.

Things are beginning to change as we slowly realise that our own health is in our hands and many people are turning to Sport to help them enjoy becoming healthier.

Sport is a diverse area, which continues to grow. Many countries around the world embrace and claim a Sport as their own, calling it a national Sport. It has become a World Wide industry in which countries compete and stake claims on titles and trophies. There seems to be a Sport that suits everyone and of every age.

There are various types of sport that range from professional to amateur. There are Olympic Standard Sports and sports that are just for fun. There are lone sports such as hurdles, javelin throwing and pool. There are team sports such as basketball, hockey and rugby. There are also sports that can be both, such as tennis, running and swimming.

Sports can be played on many different levels, such as locally, nationally and internationally. Sports can be relaxing, or stressful, depending upon which sport you choose to pursue.

There are so many different types of Sports, that it is sometimes difficult to define exactly what sport is, as for some people, in some countries, yodeling is a competitive sport!

posted by aasdas38493 @ 11:08 PM 0 comments

1972 Miami Dolphins Breath a Sigh of Relief

I was a 14 year old teenager living in Orlando, Florida when the Miami Dolphins made history with their perfect 17 - 0 season.

The following summer, our church youth group took a long hot church bus ride to Miami to watch the Dolphins in pre-season training camp. It was amazing to see linemen so huge they could sit small children in their helmets and hold out their helmet with one hand so the parents could take pictures.

I still have the football signed by Bob Griese, Paul Warfield, Larry Csonka, Jim Kiick, and Mercury Morris.

This is a record that has lasted for 33 years.

So naturally I have followed the Indianapolis Colts this season as they threatened to achieve the same undefeated record. The 2005 Indianapolis Colts certainly have similar tools to the 1972 Miami Dolphins.

You could also tell that the Colt players were getting quite sick of all the questions about the streak. I can see how that would get very old very quick. At the same time, what a nice problem to have.

So now the pressure is off with the loss to the San Diego Chargers today. No one likes to lose. At the same time, I bet they are glad all the stupid repetitious questions are over.

posted by aasdas38493 @ 7:48 PM 0 comments

Discover The Pasadena City College Flea Market And Swap Meet

On the first Sunday of every month, Pasadena City College hosts a flea market and swap meet, from 8:00am to 3:00pm. This flea market is located on the Pasadena City College campus, 1570 E. Colorado Blvd. Pasadena, CA. 91106, (626) 585-7906, on parking lots 1-4 along the south side. and the west side (Hill St.).

Over 450 vendors can be found there selling everything from high end antiques and collectibles to toys and tools to new, used and vintage clothing and used furniture. The prices are low, the lines are short and the vendors are friendly and helpful. There are also approximetly seventy (70) record vendors offering to sell and swap records, compact disks and memorabilia ranging from the big bands era to present day performers. Again the prices are quite reasonable and the vendors are friendly, helpfull and knowledgeable. They not only enjoy selling and swaping music items, they also enjoy talking about records and the music world. By the way, this is said to be one of the largest, if not the largest, record selling venues in Southern California.

According to Pasadena City College, admission to the flea market is free (this is one of the few flea markets around that still provides free admission) and parking, while sometimes difficult is also free, at the parking garage on Del Mar Blvd. or on the east side of campus at the Bonnie Avenue parking lot.

If you are looking for a flea market or swap meet that carries a good variety of merchandise, has very reasonable prices and is not overly crowded try the Pasadena City College Flea Market. Free admission and free parking makes this a good place for an outing. Even if you don't buy anything you will have a good time and it won't cost you anything.

After you finish with the flea market and swap meet, take a short drive up Colorado to Old Town Pasadena where you can dine at one of the numerous restaurants, have coffee, a capuchino or a lattee and a pastry at one of the bakeries, many with sidewalk patios, take in a movie, visit an art gallery, go dancing, take in a comedy act, shop at one of the many boutiques and stores or just go people watching.

posted by aasdas38493 @ 4:30 PM 0 comments

Siberia, Russia Part 5 - Khabarovsk and a Little Russian

In this continuing series, we cover my move from San Diego to Chita, Siberia to be a professor at Chita State Technical University. We pick up the story outside the airport in Khabarovsk, Russia.

Khabarovsk

Khabarovsk is an amazing city. Museums with works from Picasso, Rembrandt and other masters. A bustling downtown area with cafes, a lively music scene and architectural triumphs. Then again, maybe not. We were far more interested in finding a hotel with hot water and never ventured into the city.

Outside of the airport, we were a bit flummoxed by the fact there appeared to be no taxis. We quickly learned that practically any Russian with a car is also a taxi for hire. After 5 minutes of egging each other on, Grae made taxi arrangements and we were off. Apparently taking in out disheveled appearance after 3 days of traveling, our driver suggested the Intourist hotel. We readily agreed.

During communism, Intourist hotels were set up for exclusive use by foreigners. Ours was fairly nice and, importantly, had showers with copious amounts of hot water. You can see a picture at http://www.lodging.ru/hotels/intouristkhab.asp. After having returned to humanity with one of the best showers of my life, it was time to brush up on my Russian skills.

I am a huge fan of ice hockey. During the eighties and nineties, many of the best players were Russians. In interviews, they almost always talked about learning English by watching television. If it worked for them, it would work for me. Not exactly.

As Grae showered, I flipped through the eight available channels. Sitcoms were a non-starter, but I eventually found a news channel. I see the images. I know what the images are. I hear the words being spoken by the reporters. I have absolutely no idea of what words go with what images. Okay, lets back up. What words do they use over and over? Damn, do they have to talk so fast? After 30 minutes, I have learned nothing, nada, zippo. My respect for Russians playing in the NHL has never been higher.

Might as well sleep on it. Yes, day three of the trip was finally done. My original prediction of a 2-day trip was out the window. Still, we were in Russia, so how much longer could it take? Pull out a map and take a look at the country. It is twice the size of the U.S.

Next When Stairs Attack

posted by aasdas38493 @ 1:12 PM 0 comments