Frequently Asked Questions
- Q: Why should I rent a space from a nonprofit? A: Because they could use the help
- Q: Do nonprofits need to report their space rental income? A: All income a nonprofit receives is reported. Nonprofits may classify some income as UBIT. Unrelated Business Income Tax (UBIT) in the U.S. Internal Revenue Code is the tax on unrelated business income, which comes from an activity engaged in by a tax-exempt 26 USCA 501 organization that is not related to the tax-exempt purpose of that organization. So, the nonprofit may pay income tax on the income, but of course that’s a legal and accounting question and we are neither lawyers nor accountants. Even if the nonprofit has a tax liability as a result of the rental, they still get to keep the majority of the income.