The Need for Ubi Expense Allocation Methods for Tax-Exempt Organizations

Posted: 6 Dec 2005

See all articles by Pamela C. Smith

Pamela C. Smith

University of Texas at San Antonio - Department of Accounting

Abstract

This paper discusses the importance of establishing legislative guidance concerning cost-allocation methods when tax-exempt organizations are engaged in unrelated business activities. Tax-exempt organizations often report losses from unrelated business activities, and many question whether these losses are generated due to various cost allocation methods. Consistent guidance for these organizations is lacking from the Internal Revenue Service (IRS). The choice of allocation method can greatly alter the resulting profit/loss from the activity. Sound tax policy is needed to deter the over-allocation of costs related to unrelated business activities.

Suggested Citation

Smith, Pamela C., The Need for Ubi Expense Allocation Methods for Tax-Exempt Organizations. Taxes - The Tax Magazine, Vol. 83, No. 6, p. 39, June 2005, Available at SSRN: https://ssrn.com/abstract=868304

Pamela C. Smith (Contact Author)

University of Texas at San Antonio - Department of Accounting ( email )

One UTSA Circle
San Antonio, TX 78249
United States

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