Our office received a payment from an outside organization in connection with a sponsorship agreement. Should this payment be deposited in a self-supporting fund?
A. If the sponsorship payment is determined to constitute advertising, it is considered a non-qualified sponsorship and should be deposited in a self-supporting fund and may create unrelated business income (UBI). (See What is “unrelated business income” (UBI)…?). A qualified sponsorship payment for which the sponsor will receive no substantial benefit other than the use or acknowledgement of the business name, logo or product lines is considered a donation and should be recorded as a gift.
Related Questions
- If I Finally Agree To Sign An Agreement Either In Full Settlement Or For An Advance Payment And The Money Is Deposited In A Special Interest Bearing Account, How Do I Finally Withdraw It?
- Our office received a payment from an outside organization in connection with a sponsorship agreement. Should this payment be deposited in a self-supporting fund?
- Agreement was entered for PLC before 1-7-2010 and payment was received. Is service tax payable, if construction is completed after 1-7-2010?
