![]() Regulation Section 1.513-5 further defines a qualifying “bingo game” as a game of chance played with cards that are typically printed with five rows of five squares each. Section 513 defines qualifying “bingo games” as any game of bingo in which the wagers are placed, the winners are determined, and the distribution of prizes or other property is made, in the presence of all persons placing wagers in such game. Therefore, gaming income received by exempt organizations is treated as unrelated business income, unless a specific exception applies.Ĭertain bingo games - IRC Section 513(f) provides that certain bingo games are excluded from the definition of unrelated trade or business. Announcement 89-138, recaps rules on taxation applicable to gaming activity.Īs with other unrelated trade or business activities, the fact that an organization uses the proceeds from its gaming to pay for its exempt purpose programs does not make the gaming an activity related to its exempt purpose. Most gaming, if regularly carried on for profit, is an unrelated trade or business activity, which may produce unrelated business taxable income (UBTI). Publication 3079 PDF provides questions and answers that can help determine if an organization it has taxable income from gaming. “Gaming” refers to all forms of games of chance, from bingo and raffles to pari-mutuel betting and video games. 41 Taxation of Gaming Activities Conducted by Tax Exempt Organizations
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