INTERIM GUIDANCE RELEASED ON SEPARATE REPORTING OF UBI

The Treasury Department issued interim guidance covering one of the provisions of the Tax Cuts and Jobs Act (TCJA) with the greatest impact on exempt organizations: the separate reporting of taxable income from unrelated trades or businesses. Under the TCJA, organizations with unrelated business income (UBI) from more than one trade or business must calculate taxable income separately for each trade or business for tax years beginning after December 31, 2017 under the newly-created Internal Revenue Code (IRC)  §512(a)(6). This means a net loss from one unrelated trade or business may not offset net income from another unrelated trade or business. But the text of the TCJA as passed by Congress provided no clarity on what constitutes a separate trade or business.

Determining whether organizations have more than one trade or business is now up to “reasonable, good-faith interpretation”—find out what this means for your organization.

This article was originally posted on https://www.johnsonlambert.com/blog/