If your exempt organization is making money other than from contributions, you need to consider the possibility that you have unrelated business taxable income (UBIT). In our previous blog, we listed three easy exceptions. Activities that don't pass those exceptions need to consider the following three tests.

First, look at whether or not the activity is a business. Generally, this is any activity carried on to make a profit from the sale of goods or services.

How To Capitalize Interest as a Construction Cost

As construction begins on a facility, many churches finance the costs with external debt. The debt is not free since interest is paid periodically to the bank. The interest is also a cost of the construction of the asset and should be capitalized as part of the cost of the facility. The facility cost, including capitalized interest, is then depreciated over the estimated useful life of the asset – 40, 50, 70 years, or more.