Response to the following questions:
1. With regard to Unrelated Business Income Tax (UBIT), answer the following questions:
a. Which four conditions will automatically exempt entities from UBIT?
b. What are some exceptions to UBIT provided by legislation?
c. How is UBIT computed? What deductions are allowed?
2. You and a few friends have decided to establish a not-for-profit organization in your community to help provide shelter and food to the homeless and transients. Outline the steps you would take to obtain tax-exempt status, avoid paying unrelated business income tax, and so on. Consider the creation of a related entity, a foundation, as a part of your planning.