July 24, 2003 | Read Time: 1 minute
Charities in 1999 reported $4-billion in business income not related to their charitable missions, according to a new study by the Internal Revenue Service.
That’s a drop of $125-million from the amount of unrelated-business income charities reported in 1998.
The money accounted for a little over half of the $7.7-billion claimed in 1999 by all nonprofit groups, said the revenue service. A total of 11,614 nonprofit groups reported the unrelated-business income.
After taking deductions on the income, such as for depreciation of equipment and for other expenses, the amount of income that was subject to tax by charities was $380-million.
Over all, 4,340 charitable organizations paid taxes on their unrelated-business income in 1999.
Income is defined as unrelated if it is produced from a regularly conducted activity that is not directly related to an organization’s tax-exempt mission. Any profits from an organization’s unrelated-business activities are taxed at regular corporate or trust income-tax rates.
The IRS published the data in its newly released Statistics of Income Bulletin for spring 2003.
The report may be obtained for $34 from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, Pa. 15250-7954; or free online at http://www.irs.gov.
