Unrelated Business Income Tax for New Members of the Board of Perch, Inc. I. Introduction A. Reason for the UBIT: Nonexempt organizations (regular taxable business entities) would be at a substantia advantage X when trying to compete with an exempt organization. B. Tax effect 1. Treats the unrelated business income as if it were subject to the Federal corporate income tax 2. Applies the Federal corporate income tax rate when computing UBIT. C. Applicable 1. To all organizations that are exempt from Federal income tax under 501(c), except Federal agencies . 2. Includes religious, charitable, educational, literary, etc., organizations plus most other exempt organizations. 3. Does not apply if unrelated business income is not greater than $ X. II. Unrelated trade or business A. Must satisfy the following 1. Organization conducts a trade or business. 2. Trade or business is X substantially related to the exempt purpose of the organization. 3. Trade or business is intermittently X carried on by the organ