PLR 201108037: Sale of office building by charity does not result in unrelated business income

In PLR 201108037, the IRS ruled where a charity owns an office building and uses part of the building as its offices and leases to unrelated parties the rest of the office building there would be no unrelated business income from the sale of the office building by the charity.  In particular, the IRS rule that "the [b]uilding is not debt-financed property within the meaning of section 514, and, thus, any gain on the sale of the [b]uilding would be excluded from unrelated business taxable income by reasons of section 512(b)(5)."

Posted by Joseph Siegmann, Associate Editor, Wealth Strategies Journal.