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Political Organization Taxable Income Defined

Political organization taxable income is an organization’s gross income (excluding exempt function income), minus certain deductions. Allowable deductions are those generally permitted by the Internal Revenue Code that are directly connected with producing the income, computed with certain modifications, including a specific deduction of $100. Thus, investment income an organization receives is subject to tax, as is income from trade or business activities, such as renting excess office space to an unrelated organization. Taxable income includes exempt function income, such as contributions, for any period that a political organization does not file a Form 8871 as required.

 

Page Last Reviewed or Updated: 28-Mar-2016