Figuring out unrelated home business earnings is not continually very easy or intuitive. That is why the Internal Income Service (IRS) presents a particular publication, Publication 598, titled Tax on Unrelated Home business Earnings of Exempt Organizations, which offers many different examples of unrelated home business earnings.
One particular instance of unrelated home business earnings offered by the IRS focuses on museum greeting card sales. Within this instance, an art museum that exhibits modern day art also sells greeting cards that display printed reproductions of chosen performs from other art collections. Every single card is imprinted together with the name on the artist, the title or topic matter on the operate, the date or period of its creation (if identified), plus the museum’s name.
The cards include proper greetings and are personalized on request. The organization sells the cards inside the shop that it operates inside the museum and sells them at quantity discounts to retail retailers. It also sells the cards by mail order by way of a catalog that is advertised in magazines and also other publications all through the year. Consequently, a big quantity of cards are sold at a important profit. The museum is exempt as an educational organization on the basis of its ownership, upkeep, and exhibition for public viewing of performs of art. Accordingly, the IRS requires the position that the sale of greeting cards with printed reproductions of art performs contributes for the museum’s exempt educational purposes by enhancing public awareness, interest, and appreciation of art. The IRS believes that the cards could possibly encourage even more consumers to stop by the museum itself to share in educational applications. The truth that the cards are promoted and sold within a commercial manner at a profit and in competitors with commercial greeting card publishers does not alter the truth that the activity is associated with the museum’s exempt goal. For this reason, in accordance with this IRS-provided instance, these sales activities will not be unrelated earnings.
