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previous page Previous Page: Publication 598 - Tax on Unrelated Business Income of Exempt Organizations - Deductions
next page Next Page: Publication 598 - Tax on Unrelated Business Income of Exempt Organizations - S Corporation Income or Loss
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p598-008.htm#en_us_publink100067577

Partnership Income  
or Loss(p13)


rule
spacer

Partnership Income or Loss

An organization may have unrelated business income or loss as a member of a partnership, rather than through direct business dealings with the public. If so, it must treat its share of the partnership income or loss as if it had conducted the business activity in its own capacity as a corporation or trust. No distinction is made between limited and general partners. The organization is required to notify the partnership of its tax-exempt status.
Thus, if an organization is a member of a partnership regularly engaged in a trade or business that is an unrelated trade or business with respect to the organization, the organization must include in its unrelated business taxable income its share of the partnership's gross income from the unrelated trade or business (whether or not distributed), and the deductions attributable to it. The partnership income and deductions to be included in the organization's unrelated business taxable income are figured the same way as any income and deductions from an unrelated trade or business conducted directly by the organization. The partnership is required to provide the organization this information on Schedule K-1.
taxmap/pubs/p598-008.htm#en_us_publink100067578

Example.(p13)

An exempt educational organization is a partner in a partnership that operates a factory. The partnership also holds stock in a corporation. The exempt organization must include its share of the gross income from operating the factory in its unrelated business taxable income, but may exclude its share of any dividends the partnership received from the corporation.
taxmap/pubs/p598-008.htm#en_us_publink100067579

Different tax years.(p13)


rule
spacer

If the exempt organization and the partnership of which it is a member have different tax years, the partnership items that enter into the computation of the organization's unrelated business taxable income must be based on the income and deductions of the partnership for the partnership's tax year that ends within or with the organization's tax year.
previous pagePrevious Page: Publication 598 - Tax on Unrelated Business Income of Exempt Organizations - Deductions
next pageNext Page: Publication 598 - Tax on Unrelated Business Income of Exempt Organizations - S Corporation Income or Loss
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication