05/01/2018

Tax Law: ASAE Pushes for Delay in UBIT Changes

Additional guidance is urgently needed to assist tax-exempt organizations

In a continuing effort to clarify aspects of the new tax law affecting associations, ASAE sent a letter to Treasury Department officials last week requesting a one-year delay in implementing a requirement that unrelated business income (UBI) be separately computed for each business activity.

Previously, exempt organizations could report their UBI from all activities, deduct the related expenses and pay tax on the resulting net taxable income. The Tax Cuts and Jobs Act (TCJA) establishes the new separate-computation requirement to be effective for tax years beginning after Dec. 31, 2017.

“Additional guidance is urgently needed to assist tax-exempt organizations in determining with certainty what, in the administration’s interpretation, makes up a separate unrelated trade or business,” ASAE said in the letter. “Absent specific guidance, it is extremely difficult for tax-exempt organizations to keep appropriate records and report UBI accurately in compliance with this provision.”

Please select this link to read the complete article from Associations Now.