There are three elements to determine if income of an otherwise tax exempt organization is taxable:

1. Is the Income derived from a trade or business- a trade or business generally includes any activity carried on for the production of income from the sale of goods or performance of services. The trade or business can also be defined as profit motive.
2. Was the trade or business "regularly carried on"- The focus is on the frequency and continuity with which the activities are conducted and the manner in which they are pursued.
3. Was the trade or business "substantially related" to the organization's tax-exempt purpose.

• Motivated merely for production of income
• Lack of a substantive causal relationship to exempt purpose.