(a) General rule.— The term 'unrelated trade or business' means, in the case of an organization subject to the tax imposed by § 30481 of this title, any trade or business the conduct of which is not substantially related to the exercise or performance by that organization of its charitable, educational, or other purpose or function constituting the basis for its exemption under § 30471 of this title, except that said term does not include any trade or business:(1) In which substantially all the work in carrying on such trade or business is performed for the organization without compensation; or(2) which is carried on, in the case of an organization described in § 30471(a)(2) of this title, by the organization primarily for the convenience of its members, students, patients, officers, or employees, or(3) which is the selling of merchandise, substantially all of which has been received by the organization as gifts or contributions.(b) Special rule for trusts.— The term 'unrelated trade or business' means, in the case of:(1) A trust computing its unrelated business net income under § 30482 of this title for purposes of § 30412(e)(1) of this title; or(2) a trust described in §

trade or business' means, in the case of:(1) A trust computing its unrelated business net income under § 30482 of this title for purposes of § 30412(e)(1) of this title; or(2) a trust described in § 30471(a)(4)(D), § 30391(a) or § 30392(a) of this title which is exempt from tax; any trade or business regularly carried on by such trust.(c) Special rule for certain advertising businesses.— If an advertising business carried on by an organization is, without regard to this subsection, an unrelated trade or business during a taxable year beginning January 1, 1962, but before the beginning of the third succeeding taxable year the business is carried on by the organization (or by a successor who acquired such business in a liquidation which constituted a tax-free exchange under § 30144(b)(6) of this title) in such a manner that the conduct thereof is substantially related to the exercise or performance by such organization (or such successor) of its educational or other purpose or function described in § 30471(a)(2) of this title, such advertising business shall not be considered, for the taxable year, as an unrelated trade or business. History —Jan. 31, 2011, No.

r purpose or function described in § 30471(a)(2) of this title, such advertising business shall not be considered, for the taxable year, as an unrelated trade or business. History —Jan. 31, 2011, No. 1, § 1102.03, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 114.