FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 23: Exempt Entities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

True/False

Review LaterAdd Note

Review Later

In calculating unrelated business taxable income,the exempt organization is permitted to deduct only the charitable contributions associated with the unrelated trade or business.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

An eligible § 501(c)(3)organization has made the § 501(h)election to participate in lobbying on a limited basis.If the ceiling on lobbying established in § 501(h)(lobbying nontaxable amount)is exceeded,what are the potential tax consequences to the exempt organization?

Correct Answer

verified

First,a tax is levied on the excess lobbying expenditures.Second,such excess lobbying expenditures could result in revocation of exempt status by the IRS.

Question 3

Essay

Review LaterAdd Note

Help,Inc.,a tax-exempt organization,incurs lobbying expenses of $275,000 during the tax year.Help is eligible for and makes the § 501(h)lobbying expenditure election.During the year,Help spends $1,200,000 carrying out its exempt mission.

Which of the following is a requirement for exempt status?

Which of the following activities is not subject to the feeder organization rules?

Which of the following statements regarding the disclosure Regulations is correct?

The activity of exchanging with or renting to other exempt organizations the exempt organization's donor or membership list is not an unrelated trade or business.

Wonder,Inc.,a § 501(c)(3)exempt organization,acquired all the stock of a for-profit corporation for $100,000.Wonder is a private foundation.The acquired corporation was not a related business.Calculate the tax on excess business holdings.Assume that corrective action is taken so that the additional tax does not apply.

Even though a church is not required to obtain IRS approval of its exempt status,it still must file Form 990 (Return of Organization Exempt from Income Tax)annually.

Define a qualified corporate sponsorship payment.

Health,Inc.,a § 501(c)(3)exempt organization,engages in an excess benefit transaction.The amount of the excess benefit is $300,000.For the organization management,the participation in the excess benefit transaction was not willful and was due to reasonable cause.Calculate the amount of the excise tax (first-level tax)imposed under the intermediate sanctions provision.

Which of the following statements regarding intermediate sanctions is correct?

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax,but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

A profit-related activity of an exempt organization avoids the unrelated business income tax if greater than 75% of the merchandise sold had been received as a contribution.

All bona-fide churches generally are exempt from Federal income tax.

Identify the components of the tax model for unrelated business taxable income.

The tax consequences to a donor of making a charitable contribution to an exempt organization classified as a private foundation may be less favorable than the tax consequences to a donor of making a charitable contribution to an exempt organization that is not classified as a private foundation.

A feeder organization is exempt from Federal income taxation because it carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt entity.

An exempt organization can avoid classification as a private foundation if it is broadly publicly supported.To be broadly publicly supported,which of the following is required?

Orange,Inc.,a private foundation,engages in a transaction with a disqualified person in the amount of $800,000.Calculate the tax on self-dealing.Assume that corrective action is taken so that the additional tax does not apply.