Dean, Director, Department Chair signs Complete one per Department/Center, to reflect all UBI activities Original signature – mail to Payroll and Tax Services (preferred) Requires completion of UBI Questionnaire
UBI General Guidelines IRS Criteria ( Publication 598 – Tax on Unrelated Business Income of Exempt Organizations) Unrelated Activity examples Related Activity examples Potential Exclusions
UBI Financial Statement Template Workbook includes multiple sheets Improved reconciliations to GL Consistency in reporting by units Easier completion and review Instructions sheet Financial Statement (populated primarily by other sheets in the workbook) UBI% Worksheet – calculation of UBI % used
UBI Financial Statement Template (cont.) Income – record amounts by GL account and source (up to 7 sources) Cost of Goods Sold – record beginning and ending inventories and FY purchases by GL account and source Personnel Costs – record amounts by GL account and source for any accounts supporting the unrelated activity Costs for specific employees, if used, must reconcile to a Payroll Cost Distribution report
UBI Financial Statement Template UBI Financial Statement Template (cont.) Non-Personnel Expenses Grouped by category Record by GL account and source Totals flow to the Financial Statement Summary Depreciation Will be completed by Payroll and Tax Services Departments may be asked to verify equipment/buildings used for UBI activities
UBI Financial Statement Template – Non-Personnel Expenses
UBI Financial Statement Template UBI Financial Statement Template (cont.) GL Account Descriptions Resources/Links Payroll and Tax Services website IRS Publication 598 UF Contact Information Additional worksheets provided for your Supporting Schedules or Explanations
UBI Financial Statement Template – GL Accounts, Resources and Contacts
Documentary evidence of reconciliation from the PeopleSoft GL to the submitted UBI Financial Statement is required Examples of source documents: Cash Summary Appropriations Summary Grant Projects Summary KK to GL Summary Cost Distribution Reports
UBI Tax Rates Federal: Florida: 5.5% Corporate Income Tax Rate
IRS Focus Areas Continue to monitor: Activities not “regularly carried on” Lack of profit/profit motive – activities showing consistent losses (UF is required to net these losses to zero until profit is made again.) Dual-use Expense Allocations – need to recognize all funding sources and subsidies if you are calculating a UBI % to be applied to your expenses (IRS says the losses are being subsidized from somewhere!)
Reminders UBI is complex with multiple criteria and exclusions, often requiring interpretation and a case-by-case analysis. “Substance over form” - You may try to call income a qualified sponsorship, but if it has the characteristics of advertising, the IRS will likely conclude that it is. University Payroll & Tax Services is willing to help you determine if an activity might generate UBI.
Due Date Certifications, Financial Statements, and Supporting Schedules are due : Thursday, October 9, 2014 (for FY2013-2014) Questions, comments or requests for a departmental UBI visit, contact: University Payroll and Tax Services (352) 392-1231
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