IRS, Treasury Propose Long-Anticipated Regulations for Churches, Nonprofits, and Other Tax-Exempt Organizations

The Treasury Department and IRS recently proposed long-anticipated regulations April 24, 2020.

Under the TCJA (Tax Cuts and Jobs Act,) these regulations provide guidance on how to calculate the UBTI (Unrelated Business Taxable Income) for churches, nonprofits, and other tax-exempt organizations that are subject to unrelated business income tax and have more than one unrelated trade or business.

Changes under the TCJA require nonprofits and churches subject to the UBTI tax to compute UBTI, including any Net Operating Loss (NOL) deduction, separately for each trade or business (referred to as a “silo”.)

The loss from one trade or business may not offset the income from a separate trade or business beginning in tax-year 2018 (ending December 31, 2017.)

For more information on the proposed regulations, click here.

Other updates on TCJA implementation can be seen on the IRS Tax Reform page.


This text is provided with the understanding that ECFA is not rendering legal, accounting, or other professional advice or service. Professional advice on specific issues should be sought from an accountant, lawyer, or other professional.

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