Nonprofit Organizations' Income Tax Liability under the Unrelated Business Income Tax
The income of an Oregon nonprofit corporation is generally exempt from taxation. However, a nonprofit organization may incur income tax liability if it engages in certain investment strategies. Perhaps the biggest trap for the unwary is the subjugation of income derived from debt financed property owned by a nonprofit. A nonprofit should be particularly aware of the potential consequences involved in a part gift/part sale transaction. Oregon imposes the Unrelated Business Income Tax in the same manner as federal law.
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