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Article: Is endowment investment income subject to UBIT?(unrelated business income tax)
- Article from:
- The Tax Adviser
- Article date:
- May 1, 2004
- Author:
CopyrightCOPYRIGHT 2004 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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This item focuses on the applicability of the unrelated business income tax (UBIT) basics to endowment investments. Tax advisers should consider the UBIT rules when structuring investment opportunities.
The endowment portfolios of tax-exempt charitable organizations have risen, declined and risen again in value over the last decade, with increased diversity in both the types and forms of investments held. Ten years ago, only the larger endowments held investments that are now common (e.g., interests in hedge funds, private equity and offshore funds). Tax advisers should work more closely with their clients to inform them of both the tax consequences and ...