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.
- Publication 598, Tax on Unrelated Business Income of Exempt Organizations
- Exempt Organizations Continuing Professional Education Text article (1999)