Question 1

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Question 2

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax
-Tax on failure to distribute

Accepted Answer

A) 5% initial tax and 25% additional tax on private foundation. 
B) 15% initial tax and 100% additional tax on private foundation. 
C) 100% additional tax on private foundation and 50% additional tax on foundation manager. 
D) 5% initial tax and 200% additional tax on private foundation. 
E) 5% initial tax and 200% additional tax on the disqualified person. 
A) 5% initial tax and 25% additional tax on private foundation. 
B) 15% initial tax and 100% additional tax on private foundation. 
C) 100% additional tax on private foundation and 50% additional tax on foundation manager. 
D) 5% initial tax and 200% additional tax on private foundation. 
E) 5% initial tax and 200% additional tax on the disqualified person.

Question 3

Which of the following statements regarding the unrelated business income tax is correct?

Accepted Answer

A)  Private foundations are subject to the unrelated business income tax. 
B)  Bingo games are not subject to the unrelated business income tax if they are conducted by an exempt organization. 
C)  The exchange or rental of membership lists with other exempt and nonexempt organizations is not an unrelated trade or business. 
D)  All of the above statements are correct. 
E)  None of the above statements is correct. 
A)  Private foundations are subject to the unrelated business income tax. 
B)  Bingo games are not subject to the unrelated business income tax if they are conducted by an exempt organization. 
C)  The exchange or rental of membership lists with other exempt and nonexempt organizations is not an unrelated trade or business. 
D)  All of the above statements are correct. 
E)  None of the above statements is correct.

Question 4

Garden, Inc., a qualifying § 501(c)(3) organization, incurs lobbying expenditures of $210,000 during the taxable year. Exempt purpose expenditures are $900,000. If Garden makes the election under § 501(h) to make lobbying expenditures on a limited basis, its tax liability resulting from the lobbying expenditures is:

Accepted Answer

A)  $0. 
B)  $12,500. 
C)  $50,000. 
D)  $60,000. 
E)  None of the above. 
A)  $0. 
B)  $12,500. 
C)  $50,000. 
D)  $60,000. 
E)  None of the above.

Question 5

Give an example of the indicated types of exempt organizations
-§ 501(c)(6) business league

Accepted Answer

A) League of Women Voters. 
B) Teachers' association. 
C) American Plywood Association. 
D) Six Flags over Texas theme park. 
E) Salvation Army. 
A) League of Women Voters. 
B) Teachers' association. 
C) American Plywood Association. 
D) Six Flags over Texas theme park. 
E) Salvation Army.

Question 6

Match the following statements
-Form 990-PF.

Accepted Answer

A) Exempt from tax on unrelated business. 
B) Inappropriate definition. 
C) Exempt organization may be subject to the tax on unrelated business income. 
D) Annual information return of an exempt organization that is required to file a return and which is not a private foundation. 
E) Appropriate definition.
F)Annual information return of a private foundation. 
A) Exempt from tax on unrelated business. 
B) Inappropriate definition. 
C) Exempt organization may be subject to the tax on unrelated business income. 
D) Annual information return of an exempt organization that is required to file a return and which is not a private foundation. 
E) Appropriate definition.
F)Annual information return of a private foundation.

Question 7

Match the following tax forms
-Form 990

Accepted Answer

A) Return of Private Foundation. 
B) Application for Recognition of Exemption under § 501(c)(3). 
C) Return of Organization Exempt from Income Tax. 
D) Return of Certain Excise Taxes on Charities and Other Persons under Chapters 41 and 42 of the Internal Revenue Code. 
E) Application for Recognition of Exemption under § 501(a).
F)Application for Extension of Time. 
A) Return of Private Foundation. 
B) Application for Recognition of Exemption under § 501(c)(3). 
C) Return of Organization Exempt from Income Tax. 
D) Return of Certain Excise Taxes on Charities and Other Persons under Chapters 41 and 42 of the Internal Revenue Code. 
E) Application for Recognition of Exemption under § 501(a).
F)Application for Extension of Time.

Question 8

If an exempt organization is required to file an annual information return, on what form is it filed?

Accepted Answer

Exempt organizations that are not privat

Question 9

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Accepted Answer

A) True 
 B)False

Question 10

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

Accepted Answer

A) True 
 B)False

Question 11

An intermediate sanction imposed by the IRS on an exempt organization is a greater sanction than revocation of exempt status.

Accepted Answer

A) True 
 B)False

Question 12

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

Accepted Answer

A) True 
 B)False

Question 13

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

Accepted Answer

A) True 
 B)False

Question 14

Give an example of the indicated types of exempt organizations
-§ 501(c)(4) civic league

Accepted Answer

A) League of Women Voters. 
B) Teachers' association. 
C) American Plywood Association. 
D) Six Flags over Texas theme park. 
E) Salvation Army. 
A) League of Women Voters. 
B) Teachers' association. 
C) American Plywood Association. 
D) Six Flags over Texas theme park. 
E) Salvation Army.

Question 15

What tax forms are used to apply for exempt status?

Accepted Answer

An organization that is exempt under § 5

Question 16

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

Accepted Answer

A) True 
 B)False

Question 17

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

Accepted Answer

A) True 
 B)False

Question 18

Define a private foundation.

Accepted Answer

By default, all exempt entities are priv

Question 19

Which of the following statements regarding the unrelated business income tax is not correct?

Accepted Answer

A)  Unrelated business income is income from activities not related to the exempt purpose of the exempt organization. 
B)  The unrelated business income tax is levied because the exempt organization is engaging in substantial commercial activities. 
C)  If the unrelated business income tax were not levied, nonexempt organizations would be placed at a substantial disadvantage when trying to compete with the exempt organization. 
D)  The tax rate that is applied to unrelated business taxable income is the highest corporate tax rate. 
E)  All of the above statements are correct. 
A)  Unrelated business income is income from activities not related to the exempt purpose of the exempt organization. 
B)  The unrelated business income tax is levied because the exempt organization is engaging in substantial commercial activities. 
C)  If the unrelated business income tax were not levied, nonexempt organizations would be placed at a substantial disadvantage when trying to compete with the exempt organization. 
D)  The tax rate that is applied to unrelated business taxable income is the highest corporate tax rate. 
E)  All of the above statements are correct.

Question 20

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Accepted Answer

A) True 
 B)False

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax -Tax on failure to distribute

Which of the following statements regarding the unrelated business income tax is correct?

Give an example of the indicated types of exempt organizations -§ 501(c)(6) business league

Match the following statements -Form 990-PF.

Match the following tax forms -Form 990

If an exempt organization is required to file an annual information return, on what form is it filed?

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

An intermediate sanction imposed by the IRS on an exempt organization is a greater sanction than revocation of exempt status.

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

Give an example of the indicated types of exempt organizations -§ 501(c)(4) civic league

What tax forms are used to apply for exempt status?

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

Define a private foundation.

Which of the following statements regarding the unrelated business income tax is not correct?

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 15: Exempt Entities

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax -Tax on failure to distribute

Which of the following statements regarding the unrelated business income tax is correct?

Give an example of the indicated types of exempt organizations -§ 501(c)(6) business league

Match the following statements -Form 990-PF.

Match the following tax forms -Form 990

If an exempt organization is required to file an annual information return, on what form is it filed?

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

An intermediate sanction imposed by the IRS on an exempt organization is a greater sanction than revocation of exempt status.

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

Give an example of the indicated types of exempt organizations -§ 501(c)(4) civic league

What tax forms are used to apply for exempt status?

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

Define a private foundation.

Which of the following statements regarding the unrelated business income tax is not correct?

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operation, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters