Unrelated Business Taxable Income

Definition of 'Unrelated Business Taxable Income'

A tax exemption for investors in a hedge fund because the receipt of UBTI requires the tax exempt entity to file a tax return that it would not otherwise have to file, and pay taxes on income that would otherwise be exempt, at the current corporate rate.

UBTI includes most business operations income and does not include interest, dividends and gains from the sale or exchange of capital assets.

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