Unrelated business income is generally that derived from the unrelated trade or business, reduced by the deductions directly connected with the conduct of the unrelated trade or business. 1. Exempt from tax on unrelated business The trade or business is not substantially related to the exempt purpose of the organization. 2. Inappropriate definition 3. Exempt organization may be subject to the tax on unrelated business income Form 990-PF. Debt-financed income is the net income from debt financed property 4. Annual information return of an exempt organization which is not a private foundation