unrelated business income

Income recognized by an exempt organization that is generated from activities - not related to the exempt purpose of the entity. For instance, the pharmacy located in a hospital often generates unrelated business income. I.R.C. No. 511.
In order for income of tax exempt organization to be "unrelated business taxable income" income must be derived from an activity which is a trade or business, the trade or business must not be substantially related to the exempt purposes of the organization and the exempt organization must regularly carry on the trade or business. Oklahoma Cattlemen's Ass'n v. U.S., D.C. Okl., 310 F.Supp. 320, 321

Black's law dictionary. . 1990.

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