For most organizations, an activity is an unrelated business (and subject to unrelated business income tax) if it meets three requirements: It is a trade or business, It is regularly carried on, and It is not substantially related to furthering the exempt purpose of the organization. There are, however, a number of modifications, exclusions, and exceptions to the general definition of unrelated business income. Additional Information: Publication 598 PDF, Tax on Unrelated Business Income of Exempt Organizations Exempt Organizations Continuing Professional Education Text article (1999) PDF
