Nonprofit: Helping to Minimize the Risks of Losing Tax-Exempt Status

A nonprofit Organization in Summit County was concerned with UBIT (unrelated business income tax), and approached James Lyons, tax partner, for help. In general, nonprofit organizations are subject to UBIT on income derived from business that is not related to the organization's tax-exempt functions. James helped the Organization separate the taxable entity by splitting off the taxable line of business into a wholly-owned subsidiary. This restructuring helped the Organization minimize the risks of losing its tax-exempt status.