Avoiding UBIT – Follow the rules for corporate sponsorships

Description

Abstract: Many nonprofits dream of landing hefty corporate sponsorships to help pay for the costs of a conference, fundraiser or other costly event. Money from deep pockets is optimal, but an organization doesn’t want the IRS to consider the payments “paid advertising” and thus taxable as UBI. This article discusses what constitutes “qualified sponsorship payments,” permissible sponsorship use and acknowledgment, and a “substantial” return benefit.