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§ 3.5 UNRELATED BUSINESS RULESshall be excluded from such classification merely because it does not result inprofit.” 460(c) Regularly Carried OnTo be considered an unrelated trade or business, an activity of a tax-exemptorganization must be regularly carried on by the organization. 461Income from an activity of a tax-exempt organization is considered taxableonly when, assuming the other criteria are satisfied, the activity is regularly carriedon, as distinguished from sporadic or infrequent commercial transactions. 462The factors determining whether an activity is regularly carried on are the frequencyand continuity of the activity and the manner in which the activity ispursued. 463These factors must be evaluated in light of the purpose of the unrelatedbusiness income tax: to place tax-exempt organizations’ business activities onthe same tax basis as those of their nonexempt business competitors. Thus, specificbusiness activities of a tax-exempt organization will generally “be deemed‘regularly carried on’ if they manifest a frequency and continuity, and are pursuedin a manner generally similar to comparable commercial activities of nonexemptorganizations.” 464When income-producing activities are performed by commercial organizationson a year-round basis, the performance of these activities for a period ofonly a few weeks does not constitute the regular carrying on of a trade or business.465 Similarly, occasional or annual income-producing activities, such as fundraisingevents, do not constitute a business regularly carried on. The conduct ofyear-round business activities, such as parking lot rental, for one day each weekwould, however, constitute the regular carrying on of a business. 466 When commercialentities normally undertake income-producing activities on a seasonalbasis, the conduct of the activities by a tax-exempt organization during a significantportion of the season is deemed the regular conduct of that activity. 467A trade or business is regularly carried on if the attributes of the activity aresimilar to those of commercial activities of nonexempt organizations. 468(d) Concept of Unrelated BusinessThe term unrelated trade or business is defined to mean “any trade or business theconduct of which is not substantially related (aside from the need of such organizationfor income or funds or the use it makes of the profits derived) to the exerciseor performance by such organization of its charitable, educational, or otherpurpose or function constituting the basis for its exemption.” 469 Thus, a regularly460 Id.461 IRC § 512(a)(1).462 Reg. § 1.513-1(c).463 Reg. § 1.513-1(c)(1).464 Id.465 Reg. § 1.513-1(c)(2)(i).466 Id.467 Id.468 Reg. § 1.513-1(c).469 IRC § 513(a). 117