Definitions for "unrelated business taxable income"
UBTI. Income earned by a tax-exempt entity that does not result from tax-exempt...
Income earned by an otherwise tax-exempt organization from activities unrelated to their tax-exempt purpose can be subject to taxation.
Income taxable to an IRA (or other tax-exempt entity) because it is "unrelated" to the IRA's tax-exempt purpose. Typical examples are income from a manufacturing, sale or service business operated by an IRA or a partnership or LLC in which an IRA is a member, as well as unrelated debt-financed-income. The tax on this income is called unrelated business income tax, or UBIT.