Gain or loss on disposition of certain brownfield property. Gain or loss from the qualifying sale, exchange, or other disposition of a qualifying brownfield property (as defined section 512(b)(18)(C)), which was acquired by the organization after December 31, 2004, is excluded from unrelated business taxable income and is excepted from the debt-financed rules for such property. See sections 512(b)(18) and 514(b)(1)(E).

Dues received by agricultural and horticultural organizations. Generally, for 2005, annual membership dues of not more than $127 received from an associate member by a tax-exempt agricultural or horticultural organization are exempt from the tax on unrelated business income. See Dues of Agricultural Organizations and Business Leagues in chapter 4.

Indebtedness incurred by certain small business investment companies. For purposes of determining unrelated debt-financed income, indebtedness incurred by a small business investment company licensed under the Small Business Investment Act of 1958 after October 22, 2004, is excluded in determining the acquisition indebtedness with respect to debt-financed property if such indebtedness is evidenced by a debenture issued by such company and held or guaranteed by the Small Business Administration. See section 514(c)(6).

Member income of mutual or cooperative electric companies. .  For tax years beginning after October 22, 2004, income of a mutual or cooperative electric company described in section 501(c)(12) which is treated as member income under subparagraph (H) of that section is excluded from unrelated business taxable income.

An exempt organization is not taxed on its income from an activity that is substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. Such income is exempt even if the activity is a trade or business.

However, if an exempt organization regularly carries on a trade or business that is not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business.

This publication covers the rules for the tax on unrelated business income of exempt organizations. It explains:

All section references in this publication are to the Internal Revenue Code.