Cornell University Subject to Unrelated Business Income Tax for Securities Purchased on Margin

The United States Court of Appeals for the Federal Circuit ruled that securities purchased on margin by a Cornell University tax-exempt trust qualified as debt-financed property subjecting the income to the unrelated business income tax (UBIT).  The decision affirms decisions by the Federal Court of Claims as well as the Second and Third Districts.

Posted by James G. Haskell, Senior Associate Editor, Wealth Strategies Journal.