Question 1

Define average acquisition indebtedness with respect to debt-financed property.

Accepted Answer

Average acquisition indebtedness is the

Question 2

Give an example of the indicated types of exempt organizations
-§ 501(c)(3) organization

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 3

For purposes of the unrelated business income tax (UBIT), land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Accepted Answer

A)  The principal purpose of acquiring the land is for use (substantially all) in achieving the organization's exempt purpose. 
B)  The fair market value of the land is not over 50% of the fair market value of land presently owned by the exempt organization. 
C)  The use of the land by the exempt organization will begin within ten years of the acquisition date. 
D)  At the date the land is acquired, it is located in the neighborhood of other property of the organization for which substantially all the use is for achieving the organization's exempt purpose. 
E)  All of the above are requirements. 
A)  The principal purpose of acquiring the land is for use (substantially all) in achieving the organization's exempt purpose. 
B)  The fair market value of the land is not over 50% of the fair market value of land presently owned by the exempt organization. 
C)  The use of the land by the exempt organization will begin within ten years of the acquisition date. 
D)  At the date the land is acquired, it is located in the neighborhood of other property of the organization for which substantially all the use is for achieving the organization's exempt purpose. 
E)  All of the above are requirements.

Question 4

Match the following tax forms
-Form 2758

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 5

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 excess business holdings

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 6

Match the following statements
-Private foundation

Accepted Answer

A) ​May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received. 
B) Tax imposed for engaging in transactions with disqualified persons. 
C) Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses.​
​ 
A) ​May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received. 
B) Tax imposed for engaging in transactions with disqualified persons. 
C) Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses.​
​

Question 7

Arbor, Inc., an exempt organization, leases land, building, and machinery to a tenant for a 5-year period. The rent income for the land and building is $400,000 per year and that from the related machinery is $80,000 per year. Expenses incurred by Arbor for the land and building during the year are $60,000 and those for the machinery are $36,000. Net unrelated business income, which includes the above rental income and expenses, is $800,000. Calculate Arbor's unrelated business taxable income.

Accepted Answer

​ @#IMG-DLM& ​ The net rent income from the land a

Question 8

Match the following tax forms
-Form 990-PF

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 9

Match the following statements
-Form 990.

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 10

Under what circumstances are bingo games not treated as an unrelated trade or business?

Accepted Answer

A bingo game is not an unrelated trade o

Question 11

City, Inc., an exempt organization, has included among other amounts the following in calculating net unrelated business income of $500,000.   
The only expenses incurred associated with these items are rental expenses (which includes depreciation of $10,000) of $15,000. Calculate City, Inc.'s UBTI.

Accepted Answer

​ @#IMG-DLM& ​ ​ The net rental income f

Question 12

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?

Accepted Answer

A)  Federal agencies. 
B)  Churches. 
C)  Exempt organizations whose annual gross receipts do not exceed $50,000. 
D)  Private foundations. 
E)  None of these entities must file Form 990. 
A)  Federal agencies. 
B)  Churches. 
C)  Exempt organizations whose annual gross receipts do not exceed $50,000. 
D)  Private foundations. 
E)  None of these entities must file Form 990.

Question 13

If an exempt organization conducts a trade or business that is regularly carried on by the organization, it is subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Question 14

Maroon, Inc., a tax-exempt organization, leases a building and equipment to Brown Partnership. The rental income from the building is $100,000 and from the equipment is $9,000. Rental expenses are $40,000 for the building and $4,000 for the equipment. What adjustment must be made to net unrelated business income?

Accepted Answer

A)  $0 
B)  ($60,000) 
C)  ($65,000) 
D)  ($109,000) 
E)  Some other amount. 
A)  $0 
B)  ($60,000) 
C)  ($65,000) 
D)  ($109,000) 
E)  Some other amount.

Question 15

Medical, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction. The amount of the excess benefit is $50,000. 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.

Accepted Answer

Under the intermediate sanctions provisi

Question 16

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

Accepted Answer

A) True 
 B)False

Question 17

To satisfy the broadly supported provision to avoid classification as a private foundation, the exempt organization must satisfy both an external support test and an internal support test. Under the internal support test, more than one-third of the exempt organization's support for the taxable year must come from gross investment income and unrelated business taxable income.

Accepted Answer

A) True 
 B)False

Question 18

What are intermediate sanctions and to what types of exempt organizations do they apply?

Accepted Answer

Intermediate sanctions apply to so-calle

Question 19

The trade or business of selling merchandise where substantially all of the merchandise has been received as contributions or gifts is not subject to the unrelated business income tax.

Accepted Answer

A) True 
 B)False

Question 20

An exempt entity in no circumstance is subject to Federal income tax.

Accepted Answer

A) True 
 B)False

Define average acquisition indebtedness with respect to debt-financed property.

Give an example of the indicated types of exempt organizations -§ 501(c)(3) organization

For purposes of the unrelated business income tax (UBIT), land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Match the following tax forms -Form 2758

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 excess business holdings

Match the following statements -Private foundation

Match the following tax forms -Form 990-PF

Match the following statements -Form 990.

Under what circumstances are bingo games not treated as an unrelated trade or business?

City, Inc., an exempt organization, has included among other amounts the following in calculating net unrelated business income of $500,000. The only expenses incurred associated with these items are rental expenses (which includes depreciation of $10,000) of $15,000. Calculate City, Inc.'s UBTI.

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?

If an exempt organization conducts a trade or business that is regularly carried on by the organization, it is subject to the unrelated business income tax (UBIT).

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

What are intermediate sanctions and to what types of exempt organizations do they apply?

The trade or business of selling merchandise where substantially all of the merchandise has been received as contributions or gifts is not subject to the unrelated business income tax.

An exempt entity in no circumstance is subject to Federal income tax.

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

Define average acquisition indebtedness with respect to debt-financed property.

Give an example of the indicated types of exempt organizations -§ 501(c)(3) organization

For purposes of the unrelated business income tax (UBIT), land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Match the following tax forms -Form 2758

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 excess business holdings

Match the following statements -Private foundation

Match the following tax forms -Form 990-PF

Match the following statements -Form 990.

Under what circumstances are bingo games not treated as an unrelated trade or business?

City, Inc., an exempt organization, has included among other amounts the following in calculating net unrelated business income of $500,000. The only expenses incurred associated with these items are rental expenses (which includes depreciation of $10,000) of $15,000. Calculate City, Inc.'s UBTI.

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?

If an exempt organization conducts a trade or business that is regularly carried on by the organization, it is subject to the unrelated business income tax (UBIT).

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

What are intermediate sanctions and to what types of exempt organizations do they apply?

The trade or business of selling merchandise where substantially all of the merchandise has been received as contributions or gifts is not subject to the unrelated business income tax.

An exempt entity in no circumstance is subject to Federal income tax.

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