IRS, Treasury issue guidance for applying UBTI "silo" rules for tax-exempt organizations by identifying separate trades or businesses


Notice: Historical Content

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IR-2020-78, April 23, 2020

WASHINGTON — The Treasury Department and Internal Revenue Service today issued proposed regulations under the Tax Cuts and Jobs Act (TCJA) that provide guidance for tax-exempt organizations that are subject to the unrelated business income tax with more than one unrelated trade or business on how to calculate their unrelated business taxable income (UBTI).

The proposed regulations issued today provide guidance on identifying separate trades or businesses, including investment activities, as well as certain other amounts included in UBTI.

Changes under the TCJA require tax-exempt organizations subject to the UBTI tax to compute UBTI, including any NOL deduction, separately for each trade or business (referred to as a "silo").

Under prior law, UBTI was the gross income of all unrelated trades or businesses less the allowed deductions from all unrelated trades or businesses. Starting in tax-year 2018 (tax years beginning after December 31, 2017), the loss from one trade or business may not offset the income from another, separate trade or business.

Updates on the implementation of the TCJA can be found on the Tax Reform page of