Meghan Biss Talks to Tax Notes: Guidance on UBTI Allocations Allows ‘Good Faith' Interpretations

Tax-exempt organizations can rely on a "reasonable, good faith interpretation" to determine whether they have multiple unrelated trades or businesses when trying to calculate unrelated business taxable income, the IRS said in August 21 guidance.

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Directly Connected Deductions

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Meghan Biss of Caplin & Drysdale called the notice comprehensive and said the IRS "has demonstrated a real willingness to understand the significant burden this section places on organizations and attempts to create guidance with that burden in mind."

"Although there are a number of areas where they are still seeking comments, such as net operating losses, this guidance is a positive step in providing organizations with some framework to use while regulations are pending," Biss said.

For the full article, please visit Tax Notes’ website (subscription required). See also Clark Armitage’s related quote in “Exempts Score Win with GILTI Unrelated Business Income Exclusion” by Andrew Velarde for Tax Notes.

Excerpt taken from the article “Guidance on UBTI Allocations Allows ‘Good Faith' Interpretations” by Fred Stokeld for Tax Notes.