Question

Nonprofit organizations often are involved with operations that are typically outside of their main mission. For instance, a hospital chain may own a shopping center. This type of income may be classified as unrelated business activity. How would this type of transaction be accounted for on the books of the nonprofit organization? What other type of issues, either accounting or tax, may be involved?

Answer 1

The income gained from the activities other than main mission of the new n profit organisation.

Those type of income will be added into the total income of the charity organization or nin profit organisation

This type of transaction are accounted in the name of income from non primary activities or income from subsidiary activities .

There is no other types of issue related to this income in the view of direct direc but there are some issue regarding the indirect taxes of the organisation.

If the non for profit organisation has any commercial source of income which is like other than the main mission of the organisation. Has to pay the indirect taxes which has to be paid as per the law. But in the view of direct taxes all the income from activities which are non mission for the non for profit organisation was summed up to the income or contribution recived by the organisation and taxed along with only.

So there is no issues regarding direct tax but a seperate compliances should be complied by the organisation in the view of the indirect taxes.