Increase in unrelated business taxable income by disallowed fringe benefits

For organizations that have employees, unrelated business taxable income (UBTI) is increased by new Internal Revenue Code section 512(a)(7). Under section 512(a)(7), UBTI is increased by any amount for which a deduction is not allowable because of section 274 and which is paid or incurred by the organization after December 31, 2017, for any qualified transportation fringe (as defined in section 132(f)), or any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)). This rule does not apply to the extent the amount paid or incurred is directly connected with an unrelated trade or business which is regularly carried on by the organization. For organizations with a fiscal tax year that begins in 2017, enter the amount of any increase in UBTI on line 12 of the 2017 Form 990-T.