Allowable deductions.
Allowable deductions. Where an unrelated trade or business activity is of a kind carried on for profit by taxable organizations and where the exempt activity exploited by the business is a type of activity normally conducted by taxable organizations in pursuance of such business, expenses, depreciation, and similar items which are attributable to the exempt activity qualify as directly connected with the carrying on of the unrelated trade or business activity to the extent that:
(i) The aggregate of such items exceeds the income (if any) derived from or attributable to the exempt activity; and
(ii) The allocation of such excess to the unrelated trade or business activity does not result in a loss from such unrelated trade or business activity