NACUBO on behalf of the AAU and six other associations sent a letter to the IRS in response to the implementation of the guidance issued for UBTI basketing in the Tax Cuts and Jobs Act and offer several specific recommendations in the implementation of this new provision under TCJA. Prior to the Enactment of the TCJA, colleges, universities, and other exempt organizations were able to aggregate UBTI and losses and pay taxes on the net income the same as taxable entities. However, the new “basketing rule” requires tax-exempt entities to compute taxable income separately with respect to each of their trades or businesses giving rise to UBTI. This prevents higher education institutions and other nonprofit entities from offsetting the UBTI of one trade or business with the loss of another and increases the institution’s overall tax burden.