What: A live 110-minute CPE webinar with interactive Q&A
Date: Thursday, July 9, 2020
Time: 1:00PM-2:50PM EDT, 10:00AM-11:50AM PDT
This webinar will provide nonprofit advisers and exempt organization personnel with a critical analysis of proposed unrelated business taxable income (UBTI) silo regulations issued Apr. 23, 2020. These regulations offer guidance in identifying separate lines of trade or businesses for purposes of calculating UBTI as required by the 2017 tax law. The panel will detail the specifics of siloing lines of business, describe the impact of new rules governing net operating loss carryforwards, and discuss how to apply the new guidance in calculating UBTI and its required tax.
Notice 2018-67 provided preliminary guidance to tax-exempt organizations on calculating UBTI for separate lines of business as required under Section 512(a)(6) added by the recent tax law. The newly issued regulations provide new rules to separate trade or businesses and use two digits of the NAICS code to make the determination. As always, there are exceptions to the general rules, including an exception for investment activities.
Net operating losses present significant challenges for tax preparers since the new rules require that losses occurring after 2017 offset the specific trade or business activity while pre-2018 can offset aggregate UBTI. On top of this, the CARES Act added a five-year carryback of NOLs arising in 2018, 2019, or 2020. Further, taxpayers and advisers need clarification to incorporate this relief in conjunction with the newly issued regulations.
Listen as our experienced panel provides a review of the proposed silo regulations and offers practical guidance on calculating UBTI under Section 512(a)(6).
I. Background and Notice 2018-67
II. Section 512(a)(6) provisions
III. Identifying separate and unrelated lines of business using NAICS codes
V. Net operating losses
VI. The CARES Act
The panel will discuss these and other high priority topics:
- How to use NAICS codes to identify separate, unrelated trades or businesses
- What the proposed regulations say regarding the treatment of partnership income and income derived from passive investments
- How prior net operating losses are carried forward
- The interplay of the CARES Act NOL carryback provisions with the newly proposed regulations
- The new silo requirements to calculate UBTI separately for each unrelated trade or business