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Unrelated Business Taxable Income of Social Clubs: Nonrecognition of Gain

A social club does not recognize gain from selling property if:

  • The property is used directly in performing its exempt function; and
  • The club purchases and uses other property directly in performing its exempt function within a period beginning one year before and ending three years after the date of the previously owned property’s sale.

See section 512(a)(3)(D) of the Internal Revenue Code.

Page Last Reviewed or Updated: 25-Aug-2016