Ch$13\_$Discussion

Phyllis Gene is a certified human resource manager who serves on the board of a local professional association of human resource managers. The association puts on a annual conference for tis members at which there are educational workshops and keynote speakers.

For the first time, the board is considering setting up an exhibit space for vendors. The board believes that the sale of exhibit space to vendors could result in substantial revenues, which could be used to support the association's mission. A concern of Ms$.$ Gene is whether the revenues generated would be subject to unrelated business income tac. As a result, Ms$.$ Cfene has asked your assistance, as an accounting student, in helping determine any tax implications related to the proposal.

REQUIRED

Create a list of questions to post to the executive director of the association about the proposed advertising so that the board has all the relevant facts on hand.

What resources are available to investigate whether income from advertising is subject to unrelated business income tax?

What are the key issues? Can you suggest an approach to minimize any tax effects?