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Student Tax

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Student Tax

Student tax Publication 584SP - Main Content Table of Contents Cómo Utilizar Este Registro PérdidasCosto u otra base. Student tax Valor justo de mercado. Student tax Excepción en el caso de propiedad inmueble de uso personal. Student tax Más información. Student tax Para pedir formularios y publicaciones. Student tax Preguntas sobre los impuestos. Student tax Cómo Obtener Ayuda con los ImpuestosTalleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). Student tax Cómo Utilizar Este Registro Puede utilizar este registro siguiendo estos cinco pasos. Student tax Lea la Publicación 547(SP) para saber más sobre las leyes tributarias relacionadas con hechos fortuitos, desastres y robos. Student tax Familiarícese con las definiciones de costo u otra base y valor justo de mercado, las cuales se explican más adelante. Student tax Llene los Anexos 1 al 20. Student tax Lea las instrucciones del Formulario 4684, en inglés. Student tax Llene el Formulario 4684, en inglés, utilizando la información que usted escribió en los Anexos 1 al 20. Student tax Utilice la tabla que se encuentra a continuación para saber cómo hacer uso de los Anexos 1 al 19 a fin de llenar el Formulario 4684, en inglés. Student tax Utilice lo que se halla en la. Student tax . Student tax . Student tax Y anótelo en el Formulario 4684. Student tax . Student tax . Student tax Columna 1 Línea 1 Columna 2 Línea 2 Columna 3 Línea 3 Columna 4 Línea 4 Columna 5 Línea 5 Columna 6 Línea 6 Columna 7 Línea 7 Columna 8 Línea 8 Columna 9 Línea 9 Pérdidas Generalmente, tiene el derecho de deducir en su declaración de impuesto federal las pérdidas sufridas en su domicilio, sus enseres domésticos y vehículos motorizados. Student tax Sin embargo, no puede deducir una pérdida por hecho fortuito o robo que esté cubierta por seguro a menos que haya presentado oportunamente una reclamación de reembolso al seguro. Student tax Todo reembolso que usted reciba reducirá la cantidad de la pérdida. Student tax Si no presentó una reclamación de reembolso al seguro, puede deducir únicamente la porción de la pérdida que no haya sido protegida por dicho seguro. Student tax Cantidad de la pérdida. Student tax   Calcule la cantidad de su pérdida de la siguiente forma: Determine su costo u otra base en la propiedad antes del hecho fortuito o robo. Student tax Determine la disminución en el valor justo de mercado de la propiedad como resultado del hecho fortuito o robo. Student tax (La disminución del valor justo de mercado es la diferencia entre el valor de la propiedad inmediatamente antes e inmediatamente después del hecho fortuito o robo). Student tax De la cantidad menor de los puntos anteriores (1) y (2), reste todo reembolso del seguro o de otra fuente que usted haya recibido o espere recibir. Student tax   Aplique los límites a la deducción, explicados más adelante, para determinar la cantidad de su pérdida deducible. Student tax Costo u otra base. Student tax   El costo u otra base significa generalmente el costo original más toda mejora realizada a la propiedad. Student tax Si no adquirió la propiedad por medio de una compra, su base se determina según se explica en la Publicación 551, Basis of Assets (Base de los Bienes), en inglés. Student tax Si usted heredó propiedad de alguien que falleció en 2010 y el albacea del caudal hereditario eligió presentar el Formulario 8939, favor de referirse a la información proporcionada por el albacea, o vea la Publicación 4895, Tax Treatment of Property Acquired from a Decedent Dying in 2010 (Trato tributario de la propiedad adquirida de un difunto que falleció en 2010), en inglés. Student tax Valor justo de mercado. Student tax   El valor justo de mercado (FMV, por sus siglas en inglés) es el precio por el cual podría vender su propiedad a una persona dispuesta a comprarla, cuando ninguno de los dos tiene que vender o comprar y ambos están informados de todos los hechos pertinentes. Student tax Al llenar los Anexos 1 al 20, se necesita saber el valor justo de mercado de la propiedad inmediatamente antes e inmediatamente después del desastre, hecho fortuito o robo. Student tax Cálculos separados. Student tax   Generalmente, si un solo hecho fortuito o robo involucra más de un artículo de propiedad, usted tiene que calcular la pérdida de cada artículo por separado. Student tax Luego, sume las pérdidas para determinar la pérdida total de ese hecho fortuito o robo. Student tax Excepción en el caso de propiedad inmueble de uso personal. Student tax   Para calcular una pérdida de bienes inmuebles (bienes raíces) de uso personal, la propiedad entera (incluidas todas las mejoras como edificios, árboles y arbustos) se considera una unidad. Student tax Calcule la pérdida utilizando la menor de las siguientes cantidades: La disminución en el valor justo de mercado de toda la propiedad. Student tax La base ajustada de toda la propiedad. Student tax Límites de la deducción. Student tax   Después de calcular la cantidad de su pérdida según la explicación anterior, tiene que calcular qué cantidad de la pérdida puede deducir. Student tax Esto se hace en la sección A del Formulario 4684, en inglés. Student tax Si la pérdida fue de bienes de uso personal o de su familia, existen dos límites sobre la cantidad que puede deducir como pérdida por hecho fortuito o robo: Tiene que reducir cada pérdida por hecho fortuito o robo por $100 (la regla de $100). Student tax Tiene que reducir además el total de todas sus pérdidas por 10% de su ingreso bruto ajustado (la regla del 10%). Student tax Más información. Student tax   Vea la Publicación 547(SP) para más información sobre los límites de esta deducción. Student tax Cuándo su pérdida es deducible. Student tax   Normalmente, puede deducir una pérdida por hecho fortuito, o aquélla sufrida en una zona de desastre, sólo en el año tributario en el que aconteció el hecho fortuito o desastre. Student tax Normalmente puede deducir una pérdida por robo de propiedad sólo en el año en el que descubrió dicho robo. Student tax No obstante, tiene la opción de deducir las pérdidas sufridas en una zona de desastre en la declaración del año inmediatamente antes del año del desastre si el Presidente de los Estados Unidos ha declarado dicha área como zona de desastre federal. Student tax Para más información, vea el tema Pérdidas en Zonas de Desastre en la Publicación 547(SP). Student tax Comentarios y sugerencias. Student tax   Agradecemos sus comentarios acerca de esta publicación, así como sus sugerencias para ediciones futuras. Student tax   Nos puede escribir a la dirección siguiente:  Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. Student tax NW, IR-6526 Washington, DC 20224   Contestamos muchas cartas por teléfono. Student tax Por lo tanto, sería útil que incluyera en la correspondencia su número de teléfono, con el código de área, para llamar durante el día. Student tax   Nos puede enviar correspondencia electrónica (email) a la dirección electrónica taxforms@irs. Student tax gov. Student tax Escriba “Publications Comment” (Comentario sobre una Publicación) en la línea para asunto. Student tax Usted también nos puede enviar comentarios desde la página web en www. Student tax irs. Student tax gov/formspubs, en inglés, seleccionando “Comment on Tax Forms and Publications” (Enviar comentarios sobre los formularios y publicaciones de impuestos), bajo la sección “Information About” (Información sobre). Student tax Aunque no podemos contestar individualmente cada comentario, agradecemos sus comentarios y sugerencias y los tendremos en cuenta para ediciones futuras de nuestros productos tributarios. Student tax Para pedir formularios y publicaciones. Student tax   Visite www. Student tax irs. Student tax gov/formspubs para descargar formularios y publicaciones, llame al 1-800-829-3676 para pedir formulario y publicaciones o escriba a la dirección a continuación para recibir una respuesta dentro de los 10 días después de recibir su solicitud. Student tax  Internal Revenue Service 1201 N. Student tax Mitsubishi Motorway Bloomington, IL 61705-6613 Preguntas sobre los impuestos. Student tax   Si tiene una pregunta sobre los impuestos, verifique la información disponible en IRS. Student tax gov/espanol o llame al 1-800-829-1040. Student tax No podemos contestar preguntas sobre impuestos enviadas a ninguna de las dos direcciones anteriores. Student tax Cómo Obtener Ayuda con los Impuestos Puede obtener ayuda con asuntos relacionados con sus impuestos que no hayan sido aún resueltos, pedir gratuitamente publicaciones y formularios, hacer preguntas acerca de los impuestos, así como obtener más información del IRS de varias maneras. Student tax Al seleccionar el método que le resulte mejor, usted tendrá acceso rápido y fácil a ayuda relacionada con los impuestos Ayuda gratuita con la preparación de la declaración de impuestos. Student tax   Existe ayuda gratuita para la preparación de la declaración de impuestos en todo el país con voluntarios certificados por el IRS. Student tax El programa Volunteer Income Tax Assistance (Programa de Ayuda Voluntaria a los Contribuyentes o VITA, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de recursos bajos a medianos y el programa Tax Counseling for the Elderly (Programa de Asesoramiento para las Personas de Edad Avanzada o TCE, por sus siglas en inglés) está diseñado para ayudar a los contribuyentes de 60 años de edad o más con su declaración de impuestos. Student tax En la mayoría de estos locales usted puede presentar la declaración electrónicamente gratis y los voluntarios le informarán sobre los créditos y deducciones a los que quizás tenga derecho. Student tax Para ubicar un local de ayuda VITA o TCE cerca de usted, visite IRS. Student tax gov o llame al 1-800-906-9887 o 1-800-829-1040. Student tax   Como parte del programa TCE, la Asociación Estadounidense de Personas Jubiladas (AARP, por sus siglas en inglés) ofrece el programa de asesoramiento AARP Tax-Aide (Programa de Ayuda Tributaria de la Asociación Estadounidense de Personas Jubiladas). Student tax Para ubicar el sitio del programa AARP Tax-Aide más cercano, llame al 1-888-227-7669 o visite el sitio web de la AARP, www. Student tax aarp. Student tax org/money/taxaide. Student tax   Para más información sobre estos programas, visite IRS. Student tax gov e ingrese la palabra clave “VITA” en la esquina superior derecha. Student tax Internet. Student tax Puede tener acceso al sitio web del IRS, www. Student tax irs. Student tax gov/espanol las 24 horas del día, 7 días a la semana para: Revisar el estado de su reembolso para el año 2011. Student tax Visite www. Student tax irs. Student tax gov/espanol y pulse sobre el enlace “¿Dónde Está mi Reembolso?” . Student tax Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. Student tax Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). Student tax Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. Student tax Presentar la declaración por medio del sistema electrónico e-file. Student tax Aprenda sobre programas comerciales para la preparación de la declaración y los servicios e-file gratuitos para los contribuyentes que cumplan los requisitos. Student tax Descargar formularios, incluidos audioformularios, instrucciones y publicaciones. Student tax Pedir productos del IRS a través de Internet. Student tax Buscar información en Internet para aclarar sus preguntas acerca de impuestos. Student tax Buscar publicaciones en Internet por tema o palabra clave. Student tax Utilizar el Código o regulaciones de Impuestos Internos en Internet u otra información oficial. Student tax Ver los Internal Revenue Bulletins (Boletines del IRS o IRB, por sus siglas en inglés) publicados en los últimos años. Student tax Calcular los descuentos de la retención usando nuestra calculadora diseñada para este propósito en el sitio web www. Student tax irs. Student tax gov/espanol. Student tax Saber si se tiene que presentar el Formulario 6251 utilizando el Alternative Minimum Tax (AMT) Assistant (Hoja de Cómputo Electrónica para Calcular el Impuesto Mínimo Alternativo), en inglés, disponible por Internet en www. Student tax irs. Student tax gov/individuals. Student tax Suscribirse para recibir noticias sobre impuestos locales y nacionales por medio de correo electrónico. Student tax Obtener información acerca de cómo abrir y administrar un pequeño negocio. Student tax Teléfono. Student tax Muchos servicios están disponibles por teléfono. Student tax Cómo pedir formularios, instrucciones y publicaciones. Student tax Llame al 1-800-829-3676 (servicio disponible en español) para pedir formularios, instrucciones y publicaciones de este año, así como de años anteriores. Student tax Deberá recibir lo que ha pedido dentro de 10 días. Student tax Cómo hacer preguntas relacionadas con los impuestos. Student tax Llame al IRS para hacer preguntas al 1-800-829-1040. Student tax Cómo resolver problemas. Student tax Puede recibir ayuda en persona para resolver problemas tributarios en días laborables en los IRS Taxpayer Assistance Centers (Centros de Ayuda del IRS para Contribuyentes). Student tax Un funcionario le puede explicar las cartas que le ha enviado el IRS, ayudarle a hacer solicitudes para ajustes a su cuenta o ayudarle a establecer un plan de pagos. Student tax Llame al Centro de Ayuda del IRS para Contribuyentes local para pedir una cita. Student tax Para obtener el número telefónico, visite el sitio web www. Student tax irs. Student tax gov/localcontacts, en inglés, o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). Student tax Equipo TTY/TDD. Student tax Si tiene acceso a equipo TTY/TDD, llame al 1-800-829-4059 para hacer preguntas relacionadas con los impuestos o para pedir formularios y publicaciones. Student tax Temas TeleTax. Student tax Llame al 1-800-829-4477 y presione el 2 para escuchar mensajes grabados en español sobre varios temas relacionados con los impuestos. Student tax Información sobre los reembolsos. Student tax Usted puede averiguar el estado de su reembolso con la nueva aplicación para teléfonos celulares del IRS. Student tax Descargue la aplicación IRS2Go gratis cuando visite la página Web de la tienda de aplicaciones de iTunes o la del Android Marketplace. Student tax La aplicación IRS2Go es una manera nueva para nosotros proveerle información. Student tax Para averiguar el estado de su reembolso por teléfono, llame al 1-800-829-4477 y presione el 2 para escuchar información automatizada en español, 24 horas al día, 7 días a la semana. Student tax Asegúrese de esperar por lo menos 72 horas después de que el IRS acuse recibo de su declaración presentada por vía electrónica o 3 a 4 semanas después de enviar una declaración en papel. Student tax Si presentó el Formulario 8379 junto con su declaración, espere 14 semanas (11 semanas si la presentó electrónicamente). Student tax Tenga a mano su declaración de impuestos del año 2011 para poder facilitar su número de Seguro Social, su estado civil para efectos de la declaración y la cantidad exacta en dólares enteros de su reembolso. Student tax Si comprueba el estado de su reembolso y no se le da una fecha de envío, espere a la siguiente semana para volver a comprobarlo. Student tax Otra información relacionada con los reembolsos. Student tax Para averiguar el estado del reembolso o de una declaración enmendada correspondiente a un año anterior, llame al 1-800-829-1040. Student tax Cómo evaluar la calidad de nuestros servicios telefónicos. Student tax Para asegurar que las respuestas que reciba de los funcionarios del IRS sean correctas, corteses y profesionales, evaluamos la calidad de nuestros servicios telefónicos de diversas maneras. Student tax Una manera es que un segundo funcionario del IRS escuche o grabe las llamadas telefónicas en el momento en que éstas se llevan a cabo. Student tax Otra manera es pedirles a algunas de las personas que llaman que contesten una breve encuesta al final de la llamada. Student tax Visitas en persona. Student tax Muchos productos y servicios están disponibles en varios lugares públicos. Student tax Productos. Student tax Puede visitar diversas oficinas de correos, bibliotecas y oficinas del IRS para obtener formularios, instrucciones y publicaciones. Student tax Algunas oficinas del IRS, bibliotecas, supermercados, centros para hacer copias, oficinas de gobiernos municipales y de condados, cooperativas de crédito y tiendas de artículos de oficina tienen una colección de productos que se pueden imprimir de un CD o fotocopiar del documento original impreso. Student tax Además, algunas oficinas del IRS así como algunas bibliotecas tienen el Código Tributario del IRS, reglamentaciones, Boletines del IRS y Boletines Cumulativos disponibles para la búsqueda de información. Student tax Servicios. Student tax Usted puede visitar su Taxpayer Assistance Center (Centro de Ayuda para el Contribuyente) local del IRS cada día laborable para recibir ayuda en persona con respecto a todo problema relacionado con los impuestos. Student tax Un funcionario puede explicarle las cartas que le envía el IRS, le puede ayudar a hacer solicitudes para ajustar su cuenta o ayudarle a establecer un plan de pagos. Student tax Si necesita resolver un problema relacionado con los impuestos, tiene preguntas sobre cómo las leyes tributarias son aplicables a su declaración de impuestos personal o se siente más a gusto hablando con alguien en persona, visite su Centro de Ayuda para el Contribuyente a nivel local donde podrá mostrar sus archivos y documentación y hablar con un funcionario del IRS en persona. Student tax No se necesita cita, simplemente venga a hacer su consulta. Student tax Pero si prefiere, puede llamar a su centro local y dejar un mensaje solicitando una cita para resolver un asunto relacionado con su cuenta tributaria. Student tax Un funcionario le llamará dentro de 2 días laborables para hacer una cita en persona con usted. Student tax Si le queda por resolver algún problema complicado relacionado con los impuestos o si tiene alguna necesidad especial, como una discapacidad, puede solicitar una cita. Student tax Los demás asuntos se tramitan sin necesidad de hacer una cita. Student tax Para obtener el número telefónico de la oficina local, visite el sitio web www. Student tax irs. Student tax gov/localcontacts o consulte la guía telefónica bajo United States Government, Internal Revenue Service (Gobierno de los Estados Unidos, Servicio de Impuestos Internos). Student tax Correspondencia. Student tax Puede solicitar formularios, instrucciones y publicaciones enviando una solicitud a la dirección indicada a continuación y le contestaremos dentro de un período de 10 días después de haber recibido su solicitud. Student tax  Internal Revenue Service 1201 N. Student tax Mitsubishi Motorway Bloomington, IL 61705–6613 Servicio del Defensor del Contribuyente. Student tax   El Servicio del Defensor del Contribuyente (TAS por sus siglas en inglés), es su voz ante el IRS. Student tax Nuestro deber es asegurar que a cada contribuyente se le trate de forma justa, y que usted conozca y entienda sus derechos. Student tax Le ofrecemos ayuda gratuita para ayudarle a navegar el proceso, frecuentemente confuso, de resolver problemas tributarios que no ha podido resolver usted mismo. Student tax Tenga presente que lo peor que se puede hacer es no hacer nada. Student tax   El Servicio del Defensor del Contribuyente le puede ayudar si usted no puede resolver su problema con el IRS y además: Si su problema le causa problemas financieros a usted, su familia o su negocio. Student tax Si usted (o su negocio) está enfrentando la amenaza de acción adversa inmediata. Student tax Si usted ha intentado, vez tras vez, comunicarse con el IRS pero nadie le ha respondido, o si el IRS no le ha respondido antes de la fecha prometida. Student tax   Si usted reúne los requisitos para recibir nuestra ayuda, haremos todo lo posible para resolverle su problema. Student tax A usted se le asignará un defensor, quien estará a su lado en cada paso del camino. Student tax Tenemos oficinas en cada estado, el Distrito de Columbia, y Puerto Rico. Student tax Aunque TAS es una sección independiente dentro del IRS, nuestros defensores saben trabajar junto con el IRS para resolver sus provlemas. Student tax ¡Y nuestros servicios son siempre gratuitos!   Como contribuyente, usted tiene derechos que el IRS tiene que respetar cuando trata con usted. Student tax Nuestro kit de herramientas tributarias, disponible en www. Student tax taxpayeradvocate. Student tax irs. Student tax gov/Home/Spanish le puede ayudar a entender estos derechos. Student tax   Si usted cree que el TAS posiblemente le puede ayudar, llame al defensor local, cuyo número de teléfono se halla en el directorio del teléfono, y también en nuestra página Web, en www. Student tax irs. Student tax gov/advocate. Student tax Usted también podría llamarnos gratis al 1-877-777-4778. Student tax   El TAS se ocupa de resolver problemas de gran escala o problemas sistémicos que afectan a muchos contribuyentes. Student tax Si usted conoce alguno de estos asuntos, favor de informarnos del mismo utilizando el Systemic Advocacy Management System (Sistema de administración de la defensa sistémica), en inglés, en el sitio www. Student tax irs. Student tax gov/advocate. Student tax Talleres para Contribuyentes de Ingresos Bajos (LITC por sus siglas en inglés). Student tax   Los Talleres para Contribuyentes de Ingresos Bajos (LITC) son independientes del IRS. Student tax Algunos Talleres sirven a las personas cuyos ingresos estén por debajo de cierto nivel, y quienes necesitan resolver un problema tributaria. Student tax Estos talleres proporcionan gratis, o por una cuota pequeña, representación profesional ante el IRS, en la corte durante auditorias, apelaciones, disputas de cobro de impuestos, y en otros asuntos. Student tax Para esas personas que hablan inglés como segundo idioma, algunos Talleres pueden proveer información en muchos idiomas diferentes sobre los derechos y responsabilidades del contribuyente. Student tax Para más información y para hallar un Taller cerca de usted, vea la página Web de los LITC en www. Student tax irs. Student tax gov/espanol/article/0,,id=219303,00. Student tax html o en la Publicación 4134SP, Lista de Talleres para Contribuyentes de Bajos Ingresos. Student tax Esta publicación también le está disponible en la oficina local del IRS o llamando al 1-800-829-3676. Student tax Servicios Tributarios Gratuitos. Student tax   La Publicación 910, IRS Guide to Free Tax Services, (Guía de servicios gratuitos del IRS, en inglés), es su guía para los servicios y recursos proporcionados por el IRS. Student tax Con ella puede aprender más sobre la información tributaria que el IRS le proporciona gratis, inclusive publicaciones, servicios, y programas de educación y ayuda. Student tax La publicación le brinda también una índice de más de 100 temas tributarios TeleTax (información tributaria grabada) que usted puede escuchar por teléfono. Student tax La mayoría de la información y los servicios enumerados en esta publicación se le proporcionan sin costo a usted. Student tax Si hay una cuota asociada con algún recurso o servicio, esta se indica en la publicación. Student tax   Versiones accesibles de los productos publicadas por el IRS se la hacen disponibles a personas discapacitadas en varios formatos, si ellos las piden. Student tax Discos DVD para productos tributarios. Student tax Usted puede solicitar la Publicación 1796, IRS Tax Products DVD (DVD de productos tributarios del IRS), en inglés, y obtener: Formularios, instrucciones y publicaciones de impuestos del año en curso. Student tax Formularios, instrucciones y publicaciones de impuestos de años anteriores. Student tax Mapa Tributario: una herramienta de búsqueda electrónica y de ayuda. Student tax Preguntas sobre leyes tributarias hechas con frecuencia. Student tax Tax Topics (Temas Tributarios) del sistema telefónico de respuestas del IRS. Student tax Código de Impuestos Internos —Título 26 del Código de los Estados Unidos. Student tax Opciones para completar, imprimir y guardar la mayoría de los formularios de impuestos. Student tax Internal Revenue Bulletins (Boletines del IRS). Student tax Apoyo técnico telefónico gratuito y por correo electrónico. Student tax El CD que se expide dos veces al año. Student tax  — La primera entrega se envía a principios de enero del año 2012. Student tax  — La última entrega se envía a principios de marzo del año 2012. Student tax Compre el DVD del National Technical Information Service (NTIS, por sus siglas en inglés) en la página web www. Student tax irs. Student tax gov/cdorders por $30 (sin costo de tramitación) o llame gratuitamente al 1-877-233-6767 para comprar el DVD por $30 (más un cargo de tramitación de $6). Student tax Prev  Up  Next   Home   More Online Publications
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The Student Tax

Student tax 4. Student tax   Unrelated Business Taxable Income Table of Contents IncomeExclusions Dues of Agricultural Organizations and Business Leagues DeductionsDirectly Connected Exploitation of Exempt Activity—Advertising Sales Modifications Partnership Income or Loss S Corporation Income or Loss Special Rules for Foreign Organizations Special Rules for Social Clubs, VEBAs, SUBs, and GLSOsIncome that is set aside. Student tax Special Rules for Veterans' Organizations Income From Controlled OrganizationsAddition to tax for valuation misstatements. Student tax Net unrelated income. Student tax Net unrelated loss. Student tax Control. Student tax Income from property financed with qualified 501(c)(3) bonds. Student tax Disposition of property received from taxable subsidiary and used in unrelated business. Student tax Income From Debt-Financed Property Debt-Financed PropertyAcquisition Indebtedness Computation of Debt-Financed Income Deductions for Debt-Financed Property Allocation Rules How to Get Tax Help The term “unrelated business taxable income” generally means the gross income derived from any unrelated trade or business regularly conducted by the exempt organization, less the deductions directly connected with carrying on the trade or business. Student tax If an organization regularly carries on two or more unrelated business activities, its unrelated business taxable income is the total of gross income from all such activities less the total allowable deductions attributable to all the activities. Student tax In computing unrelated business taxable income, gross income and deductions are subject to the modifications and special rules explained in this chapter. Student tax Whether a particular item of income or expense falls within any of these modifications or special rules must be determined by all the facts and circumstances in each specific case. Student tax For example, if the organization received a payment termed rent that is in fact a return of profits by a person operating the property for the benefit of the organization, or that is a share of the profits retained by the organization as a partner or joint venturer, the payment is not within the income exclusion for rents, discussed later under Exclusions. Student tax Income Generally, unrelated business income is taxable, but there are exclusions and special rules that must be considered when figuring the income. Student tax Exclusions The following types of income (and deductions directly connected with the income) are generally excluded when figuring unrelated business taxable income. Student tax Dividends, interest, annuities and other investment income. Student tax   All dividends, interest, annuities, payments with respect to securities loans, income from notional principal contracts, and other income from an exempt organization's ordinary and routine investments that the IRS determines are substantially similar to these types of income are excluded in computing unrelated business taxable income. Student tax Exception for insurance activity income of a controlled foreign corporation. Student tax   This exclusion does not apply to income from certain insurance activities of an exempt organization's controlled foreign corporation. Student tax The income is not excludable dividend income, but instead is unrelated business taxable income to the extent it would be so treated if the exempt organization had earned it directly. Student tax Certain exceptions to this rule apply. Student tax For more information, see section 512(b)(17). Student tax Other exceptions. Student tax   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), to interest or annuities received from a controlled corporation (discussed under Income From Controlled Organizations, later). Student tax Income from lending securities. Student tax   Payments received with respect to a security loan are excluded in computing unrelated business taxable income only if the loan is made under an agreement that:    Provides for the return to the exempt organization of securities identical to the securities loaned, Requires payments to the organization of amounts equivalent to all interest, dividends, and other distributions that the owner of the securities is entitled to receive during the period of the loan, Does not reduce the organization's risk of loss or opportunity for gain on the securities, Contains reasonable procedures to implement the obligation of the borrower to furnish collateral to the organization with a fair market value each business day during the period of the loan in an amount not less than the fair market value of the securities at the close of the preceding business day, and Permits the organization to terminate the loan upon notice of not more than 5 business days. Student tax   Payments with respect to securities loans include: Amounts in respect of dividends, interest, and other distributions, Fees based on the period of time the loan is in effect and the fair market value of the security during that period, Income from collateral security for the loan, and Income from the investment of collateral security. Student tax The payments are considered to be from the securities loaned and not from collateral security or the investment of collateral security from the loans. Student tax Any deductions that are directly connected with collateral security for the loan, or with the investment of collateral security, are considered deductions that are directly connected with the securities loaned. Student tax Royalties. Student tax   Royalties, including overriding royalties, are excluded in computing unrelated business taxable income. Student tax   To be considered a royalty, a payment must relate to the use of a valuable right. Student tax Payments for trademarks, trade names, or copyrights are ordinarily considered royalties. Student tax Similarly, payments for the use of a professional athlete's name, photograph, likeness, or facsimile signature are ordinarily considered royalties. Student tax However, royalties do not include payments for personal services. Student tax Therefore, payments for personal appearances and interviews are not excluded as royalties and must be included in figuring unrelated business taxable income. Student tax   Unrelated business taxable income does not include royalty income received from licensees by an exempt organization that is the legal and beneficial owner of patents assigned to it by inventors for specified percentages of future royalties. Student tax   Mineral royalties are excluded whether measured by production or by gross or taxable income from the mineral property. Student tax However, the exclusion does not apply to royalties that stem from an arrangement whereby the organization owns a working interest in a mineral property and is liable for its share of the development and operating costs under the terms of its agreement with the operator of the property. Student tax To the extent they are not treated as loans under section 636 (relating to income tax treatment of mineral production payments), payments for mineral production are treated in the same manner as royalty payments for the purpose of computing unrelated business taxable income. Student tax To the extent they are treated as loans, any payments for production that are the equivalent of interest are treated as interest and are excluded. Student tax Exceptions. Student tax   This exclusion does not apply to debt-financed income (discussed under Income From Debt-Financed Property, later) or to royalties received from a controlled corporation (discussed under Income From Controlled Organizations, later). Student tax Rents. Student tax   Rents from real property, including elevators and escalators, are excluded in computing unrelated business taxable income. Student tax Rents from personal property are not excluded. Student tax However, special rules apply to “mixed leases” of both real and personal property. Student tax Mixed leases. Student tax   In a mixed lease, all of the rents are excluded if the rents attributable to the personal property are not more than 10% of the total rents under the lease, as determined when the personal property is first placed in service by the lessee. Student tax If the rents attributable to personal property are more than 10% but not more than 50% of the total rents, only the rents attributable to the real property are excluded. Student tax If the rents attributable to the personal property are more than 50% of the total rents, none of the rents are excludable. Student tax   Property is placed in service when the lessee first may use it under the terms of a lease. Student tax For example, property subject to a lease entered into on November 1, for a term starting on January 1 of the next year, is considered placed in service on January 1, regardless of when the lessee first actually uses it. Student tax   If separate leases are entered into for real and personal property and the properties have an integrated use (for example, one or more leases for real property and another lease or leases for personal property to be used on the real property), all the leases will be considered as one lease. Student tax   The rent attributable to the personal property must be recomputed, and the treatment of the rents must be redetermined, if: The rent attributable to all the leased personal property increases by 100% or more because additional or substitute personal property is placed in service, or The lease is modified to change the rent charged (whether or not the amount of rented personal property changes). Student tax Any change in the treatment of rents resulting from the recomputation is effective only for the period beginning with the event that caused the recomputation. Student tax Exception for rents based on net profit. Student tax   The exclusion for rents does not apply if the amount of the rent depends on the income or profits derived by any person from the leased property, other than an amount based on a fixed percentage of the gross receipts or sales. Student tax Exception for income from personal services. Student tax   Payment for occupying space when personal services are also rendered to the occupant does not constitute rent from real property. Student tax Therefore, the exclusion does not apply to transactions such as renting hotel rooms, rooms in boarding houses or tourist homes, and space in parking lots or warehouses. Student tax Other exceptions. Student tax   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), or to interest, annuities, royalties and rents received from a controlled corporation (discussed under Income From Controlled Organizations, later), investment income (dividends, interest, rents, etc. Student tax ) received by organizations described in sections 501(c)(7), 501(c)(9), 501(c)(17), and 501(c)(20). Student tax See Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs, discussed later for more information. Student tax Income from research. Student tax   A tax-exempt organization may exclude income from research grants or contracts from unrelated business taxable income. Student tax However, the extent of the exclusion depends on the nature of the organization and the type of research. Student tax   Income from research for the United States, any of its agencies or instrumentalities, or a state or any of its political subdivisions is excluded when computing unrelated business taxable income. Student tax   For a college, university, or hospital, all income from research, whether fundamental or applied, is excluded in computing unrelated business taxable income. Student tax   When an organization is operated primarily to conduct fundamental research (as distinguished from applied research) and the results are freely available to the general public, all income from research performed for any person is excluded in computing unrelated business taxable income. Student tax   The term research, for this purpose, does not include activities of a type normally conducted as an incident to commercial or industrial operations, such as testing or inspecting materials or products, or designing or constructing equipment, buildings, etc. Student tax In addition, the term fundamental research does not include research conducted for the primary purpose of commercial or industrial application. Student tax Gains and losses from disposition of property. Student tax   Also excluded from unrelated business taxable income are gains or losses from the sale, exchange, or other disposition of property other than: Stock in trade or other property of a kind that would properly be includable in inventory if on hand at the close of the tax year, Property held primarily for sale to customers in the ordinary course of a trade or business, or Cutting of timber that an organization has elected to consider as a sale or exchange of the timber. Student tax   It should be noted that the last exception relates only to cut timber. Student tax The sale, exchange, or other disposition of standing timber is excluded from the computation of unrelated business income, unless it constitutes property held for sale to customers in the ordinary course of business. Student tax Lapse or termination of options. Student tax   Any gain from the lapse or termination of options to buy or sell securities is excluded from unrelated business taxable income. Student tax The exclusion applies only if the option is written in connection with the exempt organization's investment activities. Student tax Therefore, this exclusion is not available if the organization is engaged in the trade or business of writing options or the options are held by the organization as inventory or for sale to customers in the ordinary course of a trade or business. Student tax Exception. Student tax   This exclusion does not apply to unrelated debt-financed income, discussed later under Income From Debt-Financed Property. Student tax Gain or loss on disposition of certain brownfield property. Student tax   Gain or loss from the qualifying sale, exchange, or other disposition of a qualifying brownfield property (as defined in section 512(b)(19)(C)), which was acquired by the organization after December 31, 2005 and before January 1, 2011, is excluded from unrelated business taxable income and is excepted from the debt-financed rules for such property. Student tax See sections 512(b)(19) and 514(b)(1)(E). Student tax Income from services provided under federal license. Student tax   There is a further exclusion from unrelated business taxable income of income from a trade or business conducted by a religious order or by an educational organization maintained by the order. Student tax   This exclusion applies only if the following requirements are met. Student tax The trade or business must have been operated by the order or by the institution before May 27, 1959. Student tax The trade or business must provide services under a license issued by a federal regulatory agency. Student tax More than 90% of the net income from the business for the tax year must be devoted to religious, charitable, or educational purposes that constitute the basis for the religious order's exemption. Student tax The rates or other charges for these services must be fully competitive with the rates or other charges of similar taxable businesses. Student tax Rates or other charges for these services will be considered as fully competitive if they are neither materially higher nor materially lower than the rates charged by similar businesses operating in the same general area. Student tax Exception. Student tax    This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later). Student tax Member income of mutual or cooperative electric companies. Student tax   Income of a mutual or cooperative electric company described in section 501(c)(12) which is treated as member income under subparagraph (H) of that section is excluded from unrelated business taxable income. Student tax Dues of Agricultural Organizations and Business Leagues Dues received from associate members by organizations exempt under section 501(c)(5) or section 501(c)(6) may be treated as gross income from an unrelated trade or business if the associate member category exists for the principal purpose of producing unrelated business income. Student tax For example, if an organization creates an associate member category solely to allow associate members to purchase insurance through the organization, the associate member dues may be unrelated business income. Student tax Exception. Student tax   Associate member dues received by an agricultural or horticultural organization are not treated as gross income from an unrelated trade or business, regardless of their purpose, if they are not more than the annual limit. Student tax The limit on dues paid by an associate member is $148 for 2011. Student tax   If the required annual dues are more than the limit, the entire amount is treated as income from an unrelated business unless the associate member category was formed or availed of for the principal purpose of furthering the organization's exempt purposes. Student tax Deductions To qualify as allowable deductions in computing unrelated business taxable income, the expenses, depreciation, and similar items generally must be allowable income tax deductions that are directly connected with carrying on an unrelated trade or business. Student tax They cannot be directly connected with excluded income. Student tax For an exception to the “directly connected” requirement, see Charitable contributions deduction, under Modifications, later. Student tax Directly Connected To be directly connected with the conduct of an unrelated business, deductions must have a proximate and primary relationship to carrying on that business. Student tax For an exception, see Expenses attributable to exploitation of exempt activities, later. Student tax Expenses attributable solely to unrelated business. Student tax   Expenses, depreciation, and similar items attributable solely to the conduct of an unrelated business are proximately and primarily related to that business and qualify for deduction to the extent that they are otherwise allowable income tax deductions. Student tax   For example, salaries of personnel employed full-time to conduct the unrelated business and depreciation of a building used entirely in the conduct of that business are deductible to the extent otherwise allowable. Student tax Expenses attributable to dual use of facilities or personnel. Student tax   When facilities or personnel are used both to conduct exempt functions and to conduct an unrelated trade or business, expenses, depreciation, and similar items attributable to the facilities or personnel must be allocated between the two uses on a reasonable basis. Student tax The part of an item allocated to the unrelated trade or business is proximately and primarily related to that business and is allowable as a deduction in computing unrelated business taxable income if the expense is otherwise an allowable income tax deduction. Student tax Example 1. Student tax A school recognized as a tax-exempt organization contracts with an individual to conduct a summer tennis camp. Student tax The school provides the tennis courts, housing, and dining facilities. Student tax The contracted individual hires the instructors, recruits campers, and provides supervision. Student tax The income the school receives from this activity is from a dual use of the facilities and personnel. Student tax The school, in computing its unrelated business taxable income, may deduct an allocable part of the expenses attributable to the facilities and personnel. Student tax Example 2. Student tax An exempt organization with gross income from an unrelated trade or business pays its president $90,000 a year. Student tax The president devotes approximately 10% of his time to the unrelated business. Student tax To figure the organization's unrelated business taxable income, a deduction of $9,000 ($90,000 × 10%) is allowed for the salary paid to its president. Student tax Expenses attributable to exploitation of exempt activities. Student tax   Generally, expenses, depreciation, and similar items attributable to the conduct of an exempt activity are not deductible in computing unrelated business taxable income from an unrelated trade or business that exploits the exempt activity. Student tax (See Exploitation of exempt functions under Not substantially related in chapter 3. Student tax ) This is because they do not have a proximate and primary relationship to the unrelated trade or business, and therefore, they do not qualify as directly connected with that business. Student tax Exception. Student tax   Expenses, depreciation, and similar items may be treated as directly connected with the conduct of the unrelated business if all the following statements are true. Student tax The unrelated business exploits the exempt activity. Student tax The unrelated business is a type normally conducted for profit by taxable organizations. Student tax The exempt activity is a type normally conducted by taxable organizations in carrying on that type of business. Student tax The amount treated as directly connected is the smaller of: The excess of these expenses, depreciation, and similar items over the income from, or attributable to, the exempt activity; or The gross unrelated business income reduced by all other expenses, depreciation, and other items that are actually directly connected. Student tax   The application of these rules to an advertising activity that exploits an exempt publishing activity is explained next. Student tax Exploitation of Exempt Activity—Advertising Sales The sale of advertising in a periodical of an exempt organization that contains editorial material related to the accomplishment of the organization's exempt purpose is an unrelated business that exploits an exempt activity, the circulation and readership of the periodical. Student tax Therefore, in addition to direct advertising costs, exempt activity costs (expenses, depreciation, and similar expenses attributable to the production and distribution of the editorial or readership content) can be treated as directly connected with the conduct of the advertising activity. Student tax (See Expenses attributable to exploitation of exempt activities under Directly Connected, earlier. Student tax ) Figuring unrelated business taxable income (UBTI). Student tax   The UBTI of an advertising activity is the amount shown in the following chart. Student tax IF gross advertising income is . Student tax . Student tax . Student tax THEN UBTI is . Student tax . Student tax . Student tax More than direct advertising costs The excess advertising income, reduced (but not below zero) by the excess, if any, of readership costs over circulation income. Student tax Equal to or less than direct advertising costs Zero. Student tax   • Circulation income and readership costs are not taken into account. Student tax   • Any excess advertising costs reduce (but not below zero) UBTI from any other unrelated business activity. Student tax   The terms used in the chart are explained in the following discussions. Student tax Periodical Income Gross advertising income. Student tax   This is all the income from the unrelated advertising activities of an exempt organization periodical. Student tax Circulation income. Student tax   This is all the income from the production, distribution, or circulation of an exempt organization's periodical (other than gross advertising income). Student tax It includes all amounts from the sale or distribution of the readership content of the periodical, such as income from subscriptions. Student tax It also includes allocable membership receipts if the right to receive the periodical is associated with a membership or similar status in the organization. Student tax Allocable membership receipts. Student tax   This is the part of membership receipts (dues, fees, or other charges associated with membership) equal to the amount that would have been charged and paid for the periodical if: The periodical was published by a taxable organization, The periodical was published for profit, and The member was an unrelated party dealing with the taxable organization at arm's length. Student tax   The amount used to allocate membership receipts is the amount shown in the following chart. Student tax   For this purpose, the total periodical costs are the sum of the direct advertising costs and the readership costs, explained under Periodical Costs, later. Student tax The cost of other exempt activities means the total expenses incurred by the organization in connection with its other exempt activities, not offset by any income earned by the organization from those activities. Student tax IF . Student tax . Student tax . Student tax THEN the amount used to allocate membership receipts is . Student tax . Student tax . Student tax 20% or more of the total circulation consists of sales to nonmembers The subscription price charged nonmembers. Student tax The above condition does not apply, and 20% or more of the members pay reduced dues because they do not receive the periodical The reduction in dues for a member not receiving the periodical. Student tax Neither of the above conditions applies The membership receipts multiplied by this fraction:   Total periodical costs Total periodical costs Plus Cost of other exempt activities Example 1. Student tax U is an exempt scientific organization with 10,000 members who pay annual dues of $15. Student tax One of U's activities is publishing a monthly periodical distributed to all of its members. Student tax U also distributes 5,000 additional copies of its periodical to nonmembers, who subscribe for $10 a year. Student tax Since the nonmember circulation of U's periodical represents one-third (more than 20%) of its total circulation, the subscription price charged to nonmembers is used to determine the part of U's membership receipts allocable to the periodical. Student tax Thus, U's allocable membership receipts are $100,000 ($10 times 10,000 members), and U's total circulation income for the periodical is $150,000 ($100,000 from members plus $50,000 from sales to nonmembers). Student tax Example 2. Student tax Assume the same facts except that U sells only 500 copies of its periodical to nonmembers, at a price of $10 a year. Student tax Assume also that U's members may elect not to receive the periodical, in which case their dues are reduced from $15 a year to $6 a year, and that only 3,000 members elect to receive the periodical and pay the full dues of $15 a year. Student tax U's stated subscription price of $9 to members consistently results in an excess of total income (including gross advertising income) attributable to the periodical over total costs of the periodical. Student tax Since the 500 copies of the periodical distributed to nonmembers represent only 14% of the 3,500 copies distributed, the $10 subscription price charged to nonmembers is not used to determine the part of membership receipts allocable to the periodical. Student tax Instead, since 70% of the members elect not to receive the periodical and pay $9 less per year in dues, the $9 price is used to determine the subscription price charged to members. Student tax Thus, the allocable membership receipts will be $9 a member, or $27,000 ($9 times 3,000 copies). Student tax U's total circulation income is $32,000 ($27,000 plus the $5,000 from nonmember subscriptions). Student tax Periodical Costs Direct advertising costs. Student tax   These are expenses, depreciation, and similar items of deduction directly connected with selling and publishing advertising in the periodical. Student tax   Examples of allowable deductions under this classification include agency commissions and other direct selling costs, such as transportation and travel expenses, office salaries, promotion and research expenses, and office overhead directly connected with the sale of advertising lineage in the periodical. Student tax Also included are other deductions commonly classified as advertising costs under standard account classifications, such as artwork and copy preparation, telephone, telegraph, postage, and similar costs directly connected with advertising. Student tax   In addition, direct advertising costs include the part of mechanical and distribution costs attributable to advertising lineage. Student tax For this purpose, the general account classifications of items includable in mechanical and distribution costs ordinarily employed in business-paper and consumer-publication accounting provide a guide for the computation. Student tax Accordingly, the mechanical and distribution costs include the part of the costs and other expenses of composition, press work, binding, mailing (including paper and wrappers used for mailing), and bulk postage attributable to the advertising lineage of the publication. Student tax   In the absence of specific and detailed records, the part of mechanical and distribution costs attributable to the periodical's advertising lineage can be based on the ratio of advertising lineage to total lineage in the periodical, if this allocation is reasonable. Student tax Readership costs. Student tax   These are all expenses, depreciation, and similar items that are directly connected with the production and distribution of the readership content of the periodical. Student tax Costs partly attributable to other activities. Student tax   Deductions properly attributable to exempt activities other than publishing the periodical may not be allocated to the periodical. Student tax When expenses are attributable both to the periodical and to the organization's other activities, an allocation must be made on a reasonable basis. Student tax The method of allocation will vary with the nature of the item, but once adopted, should be used consistently. Student tax Allocations based on dollar receipts from various exempt activities generally are not reasonable since receipts usually do not accurately reflect the costs associated with specific activities that an exempt organization conducts. Student tax Consolidated Periodicals If an exempt organization publishes more than one periodical to produce income, it may treat all of them (but not less than all) as one in determining unrelated business taxable income from selling advertising. Student tax It treats the gross income from all the periodicals, and the deductions directly connected with them, on a consolidated basis. Student tax Consolidated treatment, once adopted, must be followed consistently and is binding. Student tax This treatment can be changed only with the consent of the Internal Revenue Service. Student tax An exempt organization's periodical is published to produce income if: The periodical generates gross advertising income to the organization equal to at least 25% of its readership costs, and Publishing the periodical is an activity engaged in for profit. Student tax Whether the publication of a periodical is an activity engaged in for profit can be determined only by all the facts and circumstances in each case. Student tax The facts and circumstances must show that the organization carries on the activity for economic profit, although there may not be a profit in a particular year. Student tax For example, if an organization begins publishing a new periodical whose total costs exceed total income in the start-up years because of lack of advertising sales, that does not mean that the organization did not have as its objective an economic profit. Student tax The organization may establish that it had this objective by showing it can reasonably expect advertising sales to increase, so that total income will exceed costs within a reasonable time. Student tax Example. Student tax Y, an exempt trade association, publishes three periodicals that it distributes to its members: a weekly newsletter, a monthly magazine, and a quarterly journal. Student tax Both the monthly magazine and the quarterly journal contain advertising that accounts for gross advertising income equal to more than 25% of their respective readership costs. Student tax Similarly, the total income attributable to each periodical has exceeded the total deductions attributable to each periodical for substantially all the years they have been published. Student tax The newsletter carries no advertising and its annual subscription price is not intended to cover the cost of publication. Student tax The newsletter is a service that Y distributes to all of its members in an effort to keep them informed of changes occurring in the business world. Student tax It is not engaged in for profit. Student tax Under these circumstances, Y may consolidate the income and deductions from the monthly and quarterly journals in computing its unrelated business taxable income. Student tax It may not consolidate the income and deductions from the newsletter with the income and deductions of its other periodicals, since the newsletter is not published for the production of income. Student tax Modifications Net operating loss deduction. Student tax   The net operating loss (NOL) deduction (as provided in section 172) is allowed in computing unrelated business taxable income. Student tax However, the NOL for any tax year, the carrybacks and carryovers of NOLs, and the NOL deduction are determined without taking into account any amount of income or deduction that has been specifically excluded in computing unrelated business taxable income. Student tax For example, a loss from an unrelated trade or business is not diminished because dividend income was received. Student tax   If this were not done, organizations would, in effect, be taxed on their exempt income, since unrelated business losses then would be offset by dividends, interest, and other excluded income. Student tax This would reduce the loss that could be applied against unrelated business income of prior or future tax years. Student tax Therefore, to preserve the immunity of exempt income, all NOL computations are limited to those items of income and deductions that affect the unrelated business taxable income. Student tax   In line with this concept, an NOL carryback or carryover is allowed only from a tax year for which the organization is subject to tax on unrelated business income. Student tax   For example, if an organization just became subject to the tax last year, its NOL for that year is not a carryback to a prior year when it had no unrelated business taxable income, nor is its NOL carryover to succeeding years reduced by the related income of those prior years. Student tax   However, in determining the span of years for which an NOL may be carried back or forward, the tax years for which the organization is not subject to the tax on unrelated business income are counted. Student tax For example, if an organization was subject to the tax for 2009 and had an NOL for that year, the last tax year to which any part of that loss may be carried over is 2029, regardless of whether the organization was subject to the unrelated business income tax in any of the intervening years. Student tax   For more details on the NOL deduction, including property eligible for an extended carryback period, see sections 172 and 1400N, Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts, and Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Student tax Charitable contributions deduction. Student tax   An exempt organization is allowed to deduct its charitable contributions in computing its unrelated business taxable income whether or not the contributions are directly connected with the unrelated business. Student tax   To be deductible, the contribution must be paid to another qualified organization. Student tax For example, an exempt university that operates an unrelated business may deduct a contribution made to another university for educational work, but may not claim a deduction for contributions of amounts spent for carrying out its own educational program. Student tax   For purposes of the deduction, a distribution by a trust made under the trust instrument to a beneficiary, which itself is a qualified organization, is treated the same as a contribution. Student tax Deduction limits. Student tax   An exempt organization that is subject to the unrelated business income tax at corporate rates is allowed a deduction for charitable contributions up to 10% of its unrelated business taxable income computed without regard to the deduction for contributions. Student tax See the Instructions for Form 990-T for more information. Student tax    An exempt trust that is subject to the unrelated business income tax at trust rates generally is allowed a deduction for charitable contributions in the same amounts as allowed for individuals. Student tax However, the limit on the deduction is determined in relation to the trust's unrelated business taxable income computed without regard to the deduction, rather than in relation to adjusted gross income. Student tax   Contributions in excess of the limits just described may be carried over to the next 5 tax years. Student tax A contribution carryover is not allowed, however, to the extent that it increases an NOL carryover. Student tax Suspension of deduction limits for farmers and ranchers. Student tax   The limitations discussed above are temporarily suspended for certain qualified conservation contributions of property used in agriculture or livestock production. Student tax See the Instructions for Form 990-T for details. Student tax Specific deduction. Student tax   In computing unrelated business taxable income, a specific deduction of $1,000 is allowed. Student tax However, the specific deduction is not allowed in computing an NOL or the NOL deduction. Student tax   Generally, the deduction is limited to $1,000 regardless of the number of unrelated businesses in which the organization is engaged. Student tax Exception. Student tax   An exception is provided in the case of a diocese, province of a religious order, or a convention or association of churches that may claim a specific deduction for each parish, individual church, district, or other local unit. Student tax In these cases, the specific deduction for each local unit is limited to the lower of: $1,000, or Gross income derived from an unrelated trade or business regularly conducted by the local unit. Student tax   This exception applies only to parishes, districts, or other local units that are not separate legal entities, but are components of a larger entity (diocese, province, convention, or association) filing Form 990-T. Student tax The parent organization must file a return reporting the unrelated business gross income and related deductions of all units that are not separate legal entities. Student tax The local units cannot file separate returns. Student tax However, each local unit that is separately incorporated must file its own return and cannot include, or be included with, any other entity. Student tax See Title-holding corporations in chapter 1 for a discussion of the only situation in which more than one legal entity may be included on the same Form 990-T. Student tax Example. Student tax X is an association of churches and is divided into local units A, B, C, and D. Student tax Last year, A, B, C, and D derived gross income of, respectively, $1,200, $800, $1,500, and $700 from unrelated businesses that they regularly conduct. Student tax X may claim a specific deduction of $1,000 with respect to A, $800 with respect to B, $1,000 with respect to C, and $700 with respect to D. Student tax Partnership Income or Loss An organization may have unrelated business income or loss as a member of a partnership, rather than through direct business dealings with the public. Student tax If so, it must treat its share of the partnership income or loss as if it had conducted the business activity in its own capacity as a corporation or trust. Student tax No distinction is made between limited and general partners. Student tax The organization is required to notify the partnership of its tax-exempt status. Student tax Thus, if an organization is a member of a partnership regularly engaged in a trade or business that is an unrelated trade or business with respect to the organization, the organization must include in its unrelated business taxable income its share of the partnership's gross income from the unrelated trade or business (whether or not distributed), and the deductions attributable to it. Student tax The partnership income and deductions to be included in the organization's unrelated business taxable income are figured the same way as any income and deductions from an unrelated trade or business conducted directly by the organization. Student tax The partnership is required to provide the organization this information on Schedule K-1. Student tax Example. Student tax An exempt educational organization is a partner in a partnership that operates a factory. Student tax The partnership also holds stock in a corporation. Student tax The exempt organization must include its share of the gross income from operating the factory in its unrelated business taxable income but may exclude its share of any dividends the partnership received from the corporation. Student tax Different tax years. Student tax   If the exempt organization and the partnership of which it is a member have different tax years, the partnership items that enter into the computation of the organization's unrelated business taxable income must be based on the income and deductions of the partnership for the partnership's tax year that ends within or with the organization's tax year. Student tax S Corporation Income or Loss An organization that owns S corporation stock must take into account its share of the S corporation's income, deductions, or losses in figuring unrelated business taxable income, regardless of the actual source or nature of the income, deductions, and losses. Student tax For example, the organization's share of the S corporation's interest and dividend income will be taxable, even though interest and dividends are normally excluded from unrelated business taxable income. Student tax The organization must also take into account its gain or loss on the sale or other disposition of the S corporation stock in figuring unrelated business taxable income. Student tax Special Rules for Foreign Organizations The unrelated business taxable income of a foreign organization exempt from tax under section 501(a) consists of the organization's: Unrelated business taxable income derived from sources within the United States but not effectively connected with the conduct of a trade or business within the United States, and Unrelated business taxable income effectively connected with the conduct of a trade or business within the United States, whether or not this income is derived from sources within the United States. Student tax To determine whether income realized by a foreign organization is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States, see sections 861 through 865 and the related regulations. Student tax Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs The following discussion applies to: Social clubs described in section 501(c)(7), Voluntary employees' beneficiary associations (VEBAs) described in section 501(c)(9), Supplemental unemployment compensation benefit trusts (SUBs) described in section 501(c)(17), and Group legal services organizations (GLSOs) described in section 501(c)(20). Student tax These organizations must figure unrelated business taxable income under special rules. Student tax Unlike other exempt organizations, they cannot exclude their investment income (dividends, interest, rents, etc. Student tax ). Student tax (See Exclusions under Income, earlier. Student tax ) Therefore, they are generally subject to unrelated business income tax on this income. Student tax The unrelated business taxable income of these organizations includes all gross income, less deductions directly connected with the production of that income, except that gross income for this purpose does not include exempt function income. Student tax The dividends received by a corporation are not allowed in computing unrelated business taxable income because it is not an expense incurred in the production of income. Student tax Losses from nonexempt activities. Student tax   Losses from nonexempt activities of these organizations cannot be used to offset investment income unless the activities were undertaken with the intent to make a profit. Student tax Example. Student tax A private golf and country club that is a qualified tax-exempt social club has nonexempt function income from interest and from the sale of food and beverages to nonmembers. Student tax The club sells food and beverages as a service to members and their guests rather than for the purpose of making a profit. Student tax Therefore, any loss resulting from sales to nonmembers cannot be used to offset the club's interest income. Student tax Modifications. Student tax   The unrelated business taxable income is modified by any NOL or charitable contributions deduction and by the specific deduction (described earlier under Deductions). Student tax Exempt function income. Student tax   This is gross income from dues, fees, charges or similar items paid by members for goods, facilities, or services to the members or their dependents or guests, to further the organization's exempt purposes. Student tax Exempt function income also includes income set aside for qualified purposes. Student tax Income that is set aside. Student tax   This is income set aside to be used for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Student tax In addition, for a VEBA, SUB, or GLSO, it is income set aside to provide for the payment of life, sick, accident, or other benefits. Student tax   However, any amounts set aside by a VEBA or SUB that exceed the organization's qualified asset account limit (determined under section 419A) are unrelated business income. Student tax Special rules apply to the treatment of existing reserves for post-retirement medical or life insurance benefits. Student tax These rules are explained in section 512(a)(3)(E)(ii). Student tax   Income derived from an unrelated trade or business may not be set aside and therefore cannot be exempt function income. Student tax In addition, any income set aside and later spent for other purposes must be included in unrelated business taxable income. Student tax   Set-aside income is generally excluded from gross income only if it is set aside in the tax year in which it is otherwise includible in gross income. Student tax However, income set aside on or before the date for filing Form 990-T, including extensions of time, may, at the election of the organization, be treated as having been set aside in the tax year for which the return was filed. Student tax The income set aside must have been includible in gross income for that earlier year. Student tax Nonrecognition of gain. Student tax   If the organization sells property used directly in performing an exempt function and purchases other property used directly in performing an exempt function, any gain on the sale is recognized only to the extent that the sales price of the old property exceeds the cost of the new property. Student tax The purchase of the new property must be made within 1 year before the date of sale of the old property or within 3 years after the date of sale. Student tax   This rule also applies to gain from an involuntary conversion of the property resulting from its destruction in whole or in part, theft, seizure, requisition, or condemnation. Student tax Special Rules for Veterans' Organizations Unrelated business taxable income of a veterans' organization that is exempt under section 501(c)(19) does not include the net income from insurance business that is properly set aside. Student tax The organization may set aside income from payments received for life, sick, accident, or health insurance for the organization's members or their dependents for the payment of insurance benefits or reasonable costs of insurance administration, or for use exclusively for religious, charitable, scientific, literary, or educational purposes, or the prevention of cruelty to children or animals. Student tax For details, see section 512(a)(4) and the regulations under that section. Student tax Income From Controlled Organizations The exclusions for interest, annuities, royalties, and rents, explained earlier in this chapter under Income, may not apply to a payment of these items received by a controlling organization from its controlled organization. Student tax The payment is included in the controlling organization's unrelated business taxable income to the extent it reduced the net unrelated income (or increased the net unrelated loss) of the controlled organization. Student tax All deductions of the controlling organization directly connected with the amount included in its unrelated business taxable income are allowed. Student tax Excess qualifying specified payments. Student tax   Excess qualifying specified payments received or accrued from a controlled entity are included in a controlling exempt organization's unrelated business taxable income only on the amount that exceeds that which would have been paid or accrued if the payments had been determined under section 482. Student tax Qualifying specified payments means any payments of interest, annuities, royalties, or rents received or accrued from the controlled organization pursuant to a binding written contract in effect on August 17, 2006, or to a contract which is a renewal, under substantially similar terms of a binding written contract in effect on August 17, 2006, and the payments are received or accrued before January 1, 2012. Student tax   If a controlled participant is not required to file a U. Student tax S. Student tax income tax return, the participant must ensure that the copy or copies of the Regulations section 1. Student tax 482-7 Cost Sharing Arrangement Statement and any updates are attached to Schedule M of any Form 5471, Information Return of U. Student tax S. Student tax Persons With Respect To Certain Foreign Corporations, any Form 5472, Information Return of a 25% Foreign-Owned U. Student tax S. Student tax Corporation or a Foreign Corporation Engaged in a U. Student tax S. Student tax Trade or Business, or any Form 8865, Return of U. Student tax S. Student tax Persons With Respect to Certain Foreign Partnerships, filed for that participant. Student tax Addition to tax for valuation misstatements. Student tax   Under section 512(b)(13)(E)(ii), the tax imposed on a controlling organization will be increased by 20 percent of the excess qualifying specified payments that are determined with or without any amendments or supplements, whichever is larger. Student tax See section 512(b)(13)(E)(ii) for more information. Student tax Net unrelated income. Student tax   This is: For an exempt organization, its unrelated business taxable income, or For a nonexempt organization, the part of its taxable income that would be unrelated business taxable income if it were exempt and had the same exempt purposes as the controlling organization. Student tax Net unrelated loss. Student tax   This is: For an exempt organization, its NOL, or For a nonexempt organization, the part of its NOL that would be its NOL if it were exempt and had the same exempt purposes as the controlling organization. Student tax Control. Student tax   An organization is controlled if: For a corporation, the controlling organization owns (by vote or value) more than 50% of the stock, For a partnership, the controlling organization owns more than 50% of the profits or capital interests, or For any other organization, the controlling organization owns more than 50% of the beneficial interest. Student tax For this purpose, constructive ownership of stock (determined under section 318) or other interests is taken into account. Student tax   As a result, an exempt parent organization is treated as controlling any subsidiary in which it holds more than 50% of the voting power or value, whether directly (as in the case of a first-tier subsidiary) or indirectly (as in the case of a second-tier subsidiary). Student tax Income from property financed with qualified 501(c)(3) bonds. Student tax If any part of a 501(c)(3) organization's property financed with qualified 501(c)(3) bonds is used in a trade or business of any person other than a section 501(c)(3) organization or a governmental unit, and such use is not consistent with the requirements for qualified 501(c)(3) bonds under section 145, the section 501(c)(3) organization is considered to have received unrelated business income in the amount of the greater of the actual rental income or the fair rental value of the property for the period it is used. Student tax No deduction is allowed for interest on the private activity bond. Student tax See sections 150(b)(3) and (c) for more information. Student tax Disposition of property received from taxable subsidiary and used in unrelated business. Student tax A taxable 80%-owned subsidiary corporation of one or more tax-exempt entities is generally subject to tax on a distribution in liquidation of its assets to its exempt parent (or parents). Student tax The assets are treated as if sold at fair market value. Student tax Tax-exempt entities include organizations described in sections 501(a), 529, and 115, charitable remainder trusts, U. Student tax S. Student tax and foreign governments, Indian tribal governments, international organizations, and similar non-taxable organizations. Student tax A taxable corporation that transfers substantially all of its assets to a tax-exempt entity in a transaction that otherwise qualifies for nonrecognition treatment must recognize gain on the transaction as if it sold the assets at fair market value. Student tax However, such a transfer is not taxable if it qualifies as a like-kind exchange under section 1031 or an involuntary conversion under section 1033. Student tax In such a case the built-in appreciation is preserved in the replacement property received in the transaction. Student tax A corporation that changes status from taxable to tax-exempt is treated generally as if it transferred all of its assets to a tax-exempt entity immediately before the change in status (thus subjecting it to the tax on a deemed sale for fair market value). Student tax This rule does not apply where the taxable corporation becomes exempt within 3 years of formation, or had previously been exempt and within several years (generally a period of 3 years) regains exemption, unless the principal purpose of the transactions is to avoid the tax on the change in status. Student tax In the transactions described above, the taxable event is deferred for property that the tax-exempt entity immediately uses in an unrelated business. Student tax If the parent later disposes of the property, then any gain (not in excess of the amount not recognized) is included in the parent's unrelated business taxable income. Student tax If there is partial use of the assets in unrelated business, then there is partial recognition of gain or loss. Student tax Property is treated as disposed if the tax-exempt entity no longer uses it in an unrelated business. Student tax Losses on the transfer of assets to a tax-exempt entity are disallowed if part of a plan with a principal purpose of recognizing losses. Student tax Income From Debt-Financed Property Investment income that would otherwise be excluded from an exempt organization's unrelated business taxable income (see Exclusions under Income earlier) must be included to the extent it is derived from debt-financed property. Student tax The amount of income included is proportionate to the debt on the property. Student tax Debt-Financed Property In general, the term “debt-financed property” means any property held to produce income (including gain from its disposition) for which there is an acquisition indebtedness at any time during the tax year (or during the 12-month period before the date of the property's disposal, if it was disposed of during the tax year). Student tax It includes rental real estate, tangible personal property, and corporate stock. Student tax Acquisition Indebtedness For any debt-financed property, acquisition indebtedness is the unpaid amount of debt incurred by an organization: When acquiring or improving the property, Before acquiring or improving the property if the debt would not have been incurred except for the acquisition or improvement, and After acquiring or improving the property if: The debt would not have been incurred except for the acquisition or improvement, and Incurring the debt was reasonably foreseeable when the property was acquired or improved. Student tax The facts and circumstances of each situation determine whether incurring a debt was reasonably foreseeable. Student tax That an organization may not have foreseen the need to incur a debt before acquiring or improving the property does not necessarily mean that incurring the debt later was not reasonably foreseeable. Student tax Example 1. Student tax Y, an exempt scientific organization, mortgages its laboratory to replace working capital used in remodeling an office building that Y rents to an insurance company for nonexempt purposes. Student tax The debt is acquisition indebtedness since the debt, though incurred after the improvement of the office building, would not have been incurred without the improvement, and the debt was reasonably foreseeable when, to make the improvement, Y reduced its working capital below the amount necessary to continue current operations. Student tax Example 2. Student tax X, an exempt organization, forms a partnership with A and B. Student tax The partnership agreement provides that all three partners will share equally in the profits of the partnership, each will invest $3 million, and X will be a limited partner. Student tax X invests $1 million of its own funds in the partnership and $2 million of borrowed funds. Student tax The partnership buys as its sole asset an office building that it leases to the public for nonexempt purposes. Student tax The office building costs the partnership $24 million, of which $15 million is borrowed from Y bank. Student tax The loan is secured by a mortgage on the entire office building. Student tax By agreement with Y bank, X is not personally liable for payment of the mortgage. Student tax X has acquisition indebtedness of $7 million. Student tax This amount is the $2 million debt X incurred in acquiring the partnership interest, plus the $5 million that is X's allocable part of the partnership's debt incurred to buy the office building (one-third of $15 million). Student tax Example 3. Student tax A labor union advanced funds, from existing resources and without any borrowing, to its tax-exempt subsidiary title-holding company. Student tax The subsidiary used the funds to pay a debt owed to a third party that was previously incurred in acquiring two income-producing office buildings. Student tax Neither the union nor the subsidiary has incurred any further debt in acquiring or improving the property. Student tax The union has no outstanding debt on the property. Student tax The subsidiary's debt to the union is represented by a demand note on which the subsidiary makes payments whenever it has the available cash. Student tax The books of the union and the subsidiary list the outstanding debt as interorganizational indebtedness. Student tax Although the subsidiary's books show a debt to the union, it is not the type subject to the debt-financed property rules. Student tax In this situation, the very nature of the title-holding company and the parent-subsidiary relationship shows this debt to be merely a matter of accounting between the two organizations. Student tax Accordingly, the debt is not acquisition indebtedness. Student tax Change in use of property. Student tax   If an organization converts property that is not debt-financed property to a use that results in its treatment as debt-financed property, the outstanding principal debt on the property is thereafter treated as acquisition indebtedness. Student tax Example. Student tax Four years ago a university borrowed funds to acquire an apartment building as housing for married students. Student tax Last year, the university rented the apartment building to the public for nonexempt purposes. Student tax The outstanding principal debt becomes acquisition indebtedness as of the time the building was first rented to the public. Student tax Continued debt. Student tax   If an organization sells property and, without paying off debt that would be acquisition indebtedness if the property were debt-financed property, buys property that is otherwise debt-financed property, the unpaid debt is acquisition indebtedness for the new property. Student tax This is true even if the original property was not debt-financed property. Student tax Example. Student tax To house its administration offices, an exempt organization bought a building using $600,000 of its own funds and $400,000 of borrowed funds secured by a pledge of its securities. Student tax The office building was not debt-financed property. Student tax The organization later sold the building for $1 million without repaying the $400,000 loan. Student tax It used the sale proceeds to buy an apartment building it rents to the general public. Student tax The unpaid debt of $400,000 is acquisition indebtedness with respect to the apartment building. Student tax Property acquired subject to mortgage or lien. Student tax   If property (other than certain gifts, bequests, and devises) is acquired subject to a mortgage, the outstanding principal debt secured by that mortgage is treated as acquisition indebtedness even if the organization did not assume or agree to pay the debt. Student tax Example. Student tax An exempt organization paid $50,000 for real property valued at $150,000 and subject to a $100,000 mortgage. Student tax The $100,000 of outstanding principal debt is acquisition indebtedness, as though the organization had borrowed $100,000 to buy the property. Student tax Liens similar to a mortgage. Student tax   In determining acquisition indebtedness, a lien similar to a mortgage is treated as a mortgage. Student tax A lien is similar to a mortgage if title to property is encumbered by the lien for a creditor's benefit. Student tax However, when state law provides that a lien for taxes or assessments attaches to property before the taxes or assessments become due and payable, the lien is not treated as a mortgage until after the taxes or assessments have become due and payable and the organization has had an opportunity to pay the lien in accordance with state law. Student tax Liens similar to mortgages include (but are not limited to): Deeds of trust, Conditional sales contracts, Chattel mortgages, Security interests under the Uniform Commercial Code, Pledges, Agreements to hold title in escrow, and Liens for taxes or assessments (other than those discussed earlier in this paragraph). Student tax Exception for property acquired by gift, bequest, or devise. Student tax   If property subject to a mortgage is acquired by gift, bequest, or devise, the outstanding principal debt secured by the mortgage is not treated as acquisition indebtedness during the 10-year period following the date the organization receives the property. Student tax However, this applies to a gift of property only if:    The mortgage was placed on the property more than 5 years before the date the organization received it, and The donor held the property for more than 5 years before the date the organization received it. Student tax   This exception does not apply if an organization assumes and agrees to pay all or part of the debt secured by the mortgage or makes any payment for the equity in the property owned by the donor or decedent (other than a payment under an annuity obligation excluded from the definition of acquisition indebtedness, discussed under Debt That Is Not Acquisition Indebtedness, later). Student tax   Whether an organization has assumed and agreed to pay all or part of a debt in order to acquire the property is determined by the facts and circumstances of each situation. Student tax Modifying existing debt. Student tax   Extending, renewing, or refinancing an existing debt is considered a continuation of that debt to the extent its outstanding principal does not increase. Student tax When the principal of the modified debt is more than the outstanding principal of the old debt, the excess is treated as a separate debt. Student tax Extension or renewal. Student tax   In general, any modification or substitution of the terms of a debt by an organization is considered an extension or renewal of the original debt, rather than the start of a new one, to the extent that the outstanding principal of the debt does not increase. Student tax   The following are examples of acts resulting in the extension or renewal of a debt: Substituting liens to secure the debt, Substituting obligees whether or not with the organization's consent, Renewing, extending, or accelerating the payment terms of the debt, and Adding, deleting, or substituting sureties or other primary or secondary obligors. Student tax Debt increase. Student tax   If the outstanding principal of a modified debt is more than that of the unmodified debt, and only part of the refinanced debt is acquisition indebtedness, the payments on the refinanced debt must be allocated between the old debt and the excess. Student tax Example. Student tax An organization has an outstanding principal debt of $500,000 that is treated as acquisition indebtedness. Student tax The organization borrows another $100,000, which is not acquisition indebtedness, from the same lender, resulting in a $600,000 note for the total obligation. Student tax A payment of $60,000 on the total obligation would reduce the acquisition indebtedness by $50,000 ($60,000 x $500,000/$600,000) and the excess debt by $10,000. Student tax Debt That Is Not Acquisition Indebtedness Certain debt and obligations are not acquisition indebtedness. Student tax These include the following. Student tax Debts incurred in performing an exempt purpose. Student tax Annuity obligations. Student tax Securities loans. Student tax Real property debts of qualified organizations. Student tax Certain Federal financing. Student tax Debt incurred in performing exempt purpose. Student tax   A debt incurred in performing an exempt purpose is not acquisition indebtedness. Student tax For example, acquisition indebtedness does not include the debt an exempt credit union incurs in accepting deposits from its members or the debt an exempt organization incurs in accepting payments from its members to provide them with insurance, retirement, or other benefits. Student tax Annuity obligation. Student tax   The organization's obligation to pay an annuity is not acquisition indebtedness if the annuity meets all the following requirements. Student tax It must be the sole consideration (other than a mortgage on property acquired by gift, bequest, or devise that meets the exception discussed under Property acquired subject to mortgage or lien, earlier in this chapter) issued in exchange for the property received. Student tax Its present value, at the time of exchange, must be less than 90% of the value of the prior owner's equity in the property received. Student tax It must be payable over the lives of either one or two individuals living when issued. Student tax It must be payable under a contract that: Does not guarantee a minimum nor specify a maximum number of payments, and Does not provide for any adjustment of the amount of the annuity payments based on the income received from the transferred property or any other property. Student tax Example. Student tax X, an exempt organization, receives property valued at $100,000 from donor A, a male age 60. Student tax In return X promises to pay A $6,000 a year for the rest of A's life, with neither a minimum nor maximum number of payments specified. Student tax The amounts paid under the annuity are not dependent on the income derived from the property transferred to X. Student tax The present value of this annuity is $81,156, determined from IRS valuation tables. Student tax Since the value of the annuity is less than 90 percent of A's $100,000 equity in the property transferred and the annuity meets all the other requirements just discussed, the obligation to make annuity payments is not acquisition indebtedness. Student tax Securities loans. Student tax   Acquisition indebtedness does not include an obligation of the exempt organization to return collateral security provided by the borrower of the exempt organization's securities under a securities loan agreement (discussed under Exclusions earlier in this chapter). Student tax This transaction is not treated as the borrowing by the exempt organization of the collateral furnished by the borrower (usually a broker) of the securities. Student tax   However, if the exempt organization incurred debt to buy the loaned securities, any income from the securities (including income from