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Problem - Upward and Onward, Inc., a § 501(c)(3) organization that provides training programs for government assistance recipients, reports the following income and expenses from the sale of products associated with the training program. Calculate Upward and Onward's UBIT.
Gross income from sales $425,000
Cost of goods sold 106,000
Advertising and selling expenses 26,000
Administrative expenses 112,500
a. Assume that the sale of the training program products is substantially related to Upward and Onward's exempt purpose.
b. Assume that the sale of the training program products is not substantially related to Upward and Onward's exempt purpose.
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