Unrelated business income (UBI) includes income from activities where all work is performed by volunteers. Is this statement true or false?

Unrelated business income (UBI) refers to the income generated by a tax-exempt organization from a trade or business activity that is not substantially related to the organization's exempt purpose. The income derived from activities where all the work is performed by volunteers generally does not qualify as UBI because the IRS recognizes that activities carried out exclusively by volunteers often support the organization's mission.

When examining the nature of UBI, it is important to understand that income becomes unrelated if it comes from a trade or business not substantially connected to the exempt purpose of the organization, regardless of whether or not it is carried out by paid employees or volunteers. Thus, income solely derived from volunteer efforts, which typically align with or support the mission of the exempt organization, is generally excluded from UBI.

Therefore, the assertion that UBI includes income from activities where all work is performed by volunteers is indeed false.