IRS guidance: Publishing relationship didn’t produce UBTI

Description

Abstract: Nonprofits often don’t realize that the terms of their relationship with an outside publisher for their membership magazine or journal can put them at risk for UBTI. This article explains how such an alliance can trigger the tax by creating an agency relationship and how organizations might avoid this liability, based on IRS guidance. A sidebar explains that merely titling an agreement as a “Royalties and Licensing Agreement” won’t offer a tax advantage if the agreement is actually an agency relationship.