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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Accounting

Date & Time
  • event Date

    Wednesday, September 21, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

$197.00
CPE
ALL

This course will provide nonprofit tax professionals and advisers with a practical guide to various states' rules governing unrelated business income tax, which U.S.-based tax-exempt organizations must pay on unrelated business taxable income (UBTI). The webinar will focus on the standards and guidelines for determining whether income is UBTI and thus subject to tax, identify those states that deviate from federal treatment, and list those states whose definitions conform to federal rules but have different calculation bases.

Faculty

Nancy Ortmeyer Kuhn
Director
Jackson & Campbell

Ms. Kuhn specializes in Federal and state tax matters and is the Chair of  the firm's Tax Group. She has a strong and diverse background in tax planning, representation of taxpayers before the IRS, and tax litigation. She advises clients with complex non-profit/for-profit structures including joint ventures, affiliated 501(c)(3)/501(c)(4)/527 entities, micro-finance non-profit/for-profit affiliations, supporting organizations, and domestic/international affiliated non-profit/for-profit entities. She also assists clients in navigating and negotiating favorable settlements in employment tax and individual collection matters. She represents clients with unrelated business taxable income planning, compliance, and IRS examination issues and also advises individuals with regard to foreign and domestic tax issues.

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Julia Flannery
Tax Senior Manager
RSM US, LLP

Ms. Flannery is a Tax Senior Manager at RSM US. 

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Patrick Lawler
Senior Manager, State and Local Tax
RSM US, LLP

Mr. Lawler is a Senior Manager, State and Local Tax at RSM US LLP.

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Description

A significant challenge for exempt organizations is navigating federal and state rules on UBTI. The federal rules are often complex even with existing guidance; however, the variances in how states treat UBTI create additional difficulties for advisers to nonprofits. While most states conform to the federal government in both classifying an organization as tax exempt and in defining UBTI, there are numerous deviations from federal treatment.

With very few exceptions, most states impose a state-level tax on UBTI. Many of these states start with the federal definition of UBTI, but make state-specific modifications, generally in the form of required "add-backs." Additionally, many states do not allow exempt entities to carry-back net operating losses; some of these states permit loss carry-forwards for UBTI calculation purposes.

Perhaps the most complicated task for exempt organizations operating in multiple states is apportioning UBTI between the various states in which the nonprofit operates. Many states require exempt entities to use different apportionment formula approaches than they impose on for-profit companies. Advisers to exempt organizations must be able to reconcile various apportionment formulas and recognize where a state requires a specific apportionment requirement for UBTI.

Listen as our panel of experienced nonprofit tax advisers provides a practical guide to navigating multistate tax treatment of UBTI for exempt organizations.

Outline

  1. Federal treatment of UBTI
    1. Identifying UBTI
    2. UBTI calculations and schedules
    3. Tax computation
    4. Allocation of expense deductions
  2. State treatment of UBTI
    1. States not conforming with federal exempt org classification
    2. States that tax UBTI
    3. Common states' adjustments to federal UBTI calculations
    4. Range of rules for NOL carry-backs and carry-forwards
    5. Apportionment challenges
    6. Pass-through considerations
    7. Section 512(a)(6) Siloing unrelated trade and businesses

Benefits

The panel will discuss these and other important topics:

  • What states deviate from federal treatment of UBTI?
  • What states generally conform to federal UBTI calculations but with add-backs?
  • State deviations in NOL carry-back and carry-forward treatment for UBTI
  • Which states require a different formula for apportioning UBTI than the one applicable to for-profit commercial entities?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify those states that conform to federal UBTI calculations but have state-specific adjustments
  • Discern various state trends on carry-back and carry-forward treatment of UBTI
  • Recognize those states that require different apportionment formulas for UBTI calculations than they require of for-profit entities

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing tax forms and schedules for nonprofit and exempt organizations, among others; supervisory authority over other preparers/accountants. Knowledge and understanding of unrelated business income tax in the context of tax-exempt organizations; familiarity with state vs federal treatment of exempt organization income subject to taxation.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.