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Message: [QUOTE="FloridaCuse, post: 5565996, member: 8912"] tax "expert" here but not very knowledgable about the area of tax-exempt organizations, especially the sub-topic of unrelated business income. It's a murky area. The tax law itself in this area is not a model of clarity. Some general principles are set forth. I've previously posted in this Forum (I don't remember if it's previously in this thread or an other one, probably here) that the origin of the concept of unrelated business income to an otherwise tax-exempt organization and it being subject to tax goes back to the '50s or '60s when New York University owned the Mueller Macaroni Company (this may not be its proper name). Congress decided that a business enterprise should not be tax-free just because it was owned by a tax-exempt organization and be able to unfairly compete against taxable business enterprises. So an initial question under this line of thinking is at what point do the activities of a tax-exempt university become in competition with other taxable business enterprises. But in the current B1G case, the University of California, the potential investor, is itself a tax-exempt organization. So it may be hard to get there. If instead this were a private equity firm, any profits earned by it from the 10% ownership of the Big Ten Enterprises entity would be subject to tax to the private equity firm. That would not in and of itself make Big Ten Enterprises subject to tax itself. But if Big Ten Enterprises was deemed to be in competition with other businesses that are taxable, it could bring it within the unrelated business income rules. Sorry if this is a bit of a convoluted explanation. BUT, aside from what current tax law is or may be, Congress can decide that this area of tax-exempt organization needs reform and of course they can do what ever they want (of course generally with Presidential agreement). So I think it is more likely that there is at least a threat of potential new legislation to affect this area rather than much activity by the IRS to push the envelope to subject it to tax. I think it is more likely that Senator Cantwell or other legislators will use the threat of potential tax legislation to try to stop this whole idea than there is actual legislation enacted. This isn't fully a legal response but maybe a practical one. [USER=622]HtownOrange[/USER] I hope this sheds at least a little light on your point. [/QUOTE]

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