Tax Tips Logo ImageISSUE

On this 5th Anniversary of “Tax Tips,” let’s look back to our beginnings – with a COVID-19 twist – and Summer Camp activities.



Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

TBC has some dormitories that are used to house students during the fall and spring semesters.  During the summer months, TBC usually conducts summer basketball camps for youth. TBC collects fees for the camps and part of the fee goes to room and board – campers stay in the dorms and eat in the cafeteria. TBC considers this activity to be related to its exempt purpose (education).  The revenue could be deemed “dual-use facilities” income (and result in unrelated business income) if – for instance – the camp was run by a coach’s LLC or corporation (which we see often in our client base).

For Summer 2020, TBC is running “virtual” basketball camps.  They have partnered with churches who will have fewer than ten campers attend at the church site, agree to practice “social distancing,” and TBC will provide content and instruction via video.  Campers register on-line at TBC’s Athletics webpage and TBC shares 50% of the fee with the sponsoring local churches.

Income from the virtual basketball camp is from an exempt activity that is substantially related to TBC’s exempt purposes and is not unrelated business income.  The fact that it is a “virtual” camp should have no bearing on the activity being related.  Also, depending on other factors, the camps might be considered to be not regularly carried on if only conducted for one summer.



From “ADVISORY COMMITTEE ON TAX EXEMPT AND GOVERNMENT ENTITIES (ACT) Report Number 13, June 2014 (Exempt Organizations, Appendix A):

Situation 18  G is a public university that directly operates a basketball camp for children in grades 5 through high school. This camp operation utilizes G’s residence, dining, and athletic facilities and is operated to provide basketball instruction to children and is an integral part of G’s educational program. Income from the basketball camp is from an exempt activity that is substantially related to G’s exempt purposes and is not unrelated business income.

From Treasury Regulation 1.513-1(d)(4)(iii):

In certain cases, an asset or facility necessary to the conduct of exempt functions may also be employed in a commercial endeavor. In such cases, the mere fact of the use of the asset or facility in exempt functions does not, by itself, make the income from the commercial endeavor gross income from related trade or business. The test, instead, is whether the activities productive of the income in question contribute importantly to the accomplishment of exempt purposes.

From Private Letter Ruling 8151005:

RULED: Income from hockey camp is from exempt activity related to C’s purposes and isn’t subject to tax. It was directly operated by C, to provide hockey instruction for children and is integral part of C’s educational program.

From Rev. Rul. 76-402, 1976-2 C.B. 177:

The ruling states that an exempt school annually contracts with an individual who conducts a 10-week summer tennis camp with the school furnishing the tennis courts, housing, and dining facilities and the individual hiring the instructors, recruiting campers, and providing supervision. The amounts received are from the dual use of facilities and personnel; therefore, an allocable portion of expenses attributable to such facilities and personnel may be deducted in computing unrelated business taxable income under IRC 512.



  • Summer camps always provide interesting facts for UBIT scenarios and analyses.
  • It is interesting to contemplate whether holding, hosting, or renting facilities for a “virtual” summer camp may produce unrelated business income.
  • Your school should know that the rental of personal property – video equipment, athletic equipment, etc. – might be more apt to produce UBI.
  • The I.R.C. Section 512(a)(6) “silo-ing” rules can add another dimension to summer camp revenue conversations and analyses.

Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.


© 2020 Moja & Company, LLC