Financial Affairs  » Tax Accounting  » Unrelated Business Income

Is your department generating "Unrelated Business Income" (UBI)?

As a 501(c)(3) organization Georgetown University is generally exempt from income tax.  However, under certain circumstances income it receives may result in income tax.

Generally, if the income received meets all three of the following criteria, it constitutes UBI;

1. It is income from trade or business; 
2. such trade or business is regularly carried on by the organization; and 
3. the conduct of such trade or business is not substantially related (other than through the production of funds) to the organization's performance of its exempt functions.

However, there are many exceptions and special circumstances that may cause a revenue stream to be deemed UBI or exempted from tax.

Before entering into revenue generating agreements contact John C. Kotwicki, Director - Tax and Asset Management, @ (202) 687-5449 (kotwickj@georgetown.edu) to determine whether the income earned will be subject to UBI reporting requirements.