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.