What is UBIT?
Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization's exemption.
The Tax Cuts and Jobs Act, passed in December 2017, changes the way the University will report UBIT beginning in Fiscal Year 2019. Instead of aggregating all UBIT activities as we currently do, UBIT activities will be required to be reported separately. CU is currently awaiting guidance from the IRS about what defines a UBIT activity.
Why is it Important to CU?
If we incur unrelated business taxable income, we need to make quarterly estimated tax payments on that income during the fiscal year.
Do you think you have UBIT activities in your organizational unit?
Tell us about the activity, using the form below.