Unrelated Business Income Tax – Updates under TCJA
Nick Preusch CPA, JD, LLM, is a tax manager with PBMares, LLP. Nick has participated in helping high wealth individual and large business entities with complex tax compliance, along with specializing in international, not-for-profit tax issues, and tax ethics issues.
Nick has also worked with the Internal Revenue Service as a Revenue Agent and an Attorney with the IRS Office of Professional Responsibility. Nick is a graduate of Carthage College with a BS in Accounting and Business, the University of Connecticut with an MA in Accounting, Case Western Reserve University with a JD, and Georgetown University with an LLM in taxation. Nick has also authored publications for the AICPA’s Journal of Accountancy, AICPA’s Tax Advisor, NATP’s Tax Pro Journal, and CCH’s Journal of Tax Practice and Procedure. He also co-authored a textbook, Tax Preparer Penalties, and Circular 230 Enforcement, published by Thomson Reuters. He has lectured nationally on topics such as ethics, complex tax transactions, and IRS practice and procedure.
Currently, Nick is an adjunct professor at the University of Mary Washington. Nick has been recognized as the Top 5 Under 35 CPAs in Virginia by the VSCPA in 2017 and CPA Practice Advisor’s Top 40 Under 40. He is a member of the VSCPA’s Tax Advisory Committee and Ethics Committee, and the AICPA’s Tax Practice and Responsibilities Committee.
This topic will start off with a general understanding of what is unrelated business income. It will look deeply into how to tell if income streams are related or unrelated to the non-for-profits mission along with the other rules that could exempt the income from this category.
We will also look at how to calculate the unrelated business income tax under the Tax Cuts and Jobs Act. The TCJA made it so non-for-profits can no longer aggregate their unrelated business income.
The TCJA also subjects certain expenses as unrelated business income. This is where the idea of Fake unrelated business comes in. Some non-for-profits may need to start treating certain expenses as income that is subject to tax. This is one area where the IRS could really get unsuspecting non-for-profits.
We will also look at ways to minimize the impact of the TCJA on non-for-profits. Finally, we will cover other changes for non-for-profits under the TCJA that each non-for-profit should be aware of.
- Understand what is Unrelated Business Income
- Be able to calculate the Business Income Tax
- Determine what FUBIT (Fake Business Income Tax) is
- Minimize the impact of FUBIT
- Understand the other changes affecting UBIT
Course Level - Basic/Intermediate
Who Should Attend
- CEO’s / CFO’s / CTO’s
- Financial Professionals
- Controllers of NFPs
- Financial Consultants
Why Should You Attend
The Tax Cuts and Jobs Act through the Non-for-Profit area on its head with how it changed both calculating what Unrelated Business Income Tax (UBIT) is, but also creating new categories of UBIT such as Fake Unrelated Business Income (FUBIT). If you deal with non-for-profits, you need to be aware of these changes or you could face IRS tax assessments and penalties. Most of these changes are very nuanced and many non-for-profits are not even aware of them, so it is very important to get on top of these.