Question 1

Match the following tax forms.
-Form 1024

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) Application for Recognition of Exemption under § 501(a). 
A) Return of Private Foundation. 
B) Application for Recognition of Exemption under § 501(c)(3). 
C) Return of Organization Exempt from Income Tax. 
D) Application for Recognition of Exemption under § 501(a). D

Question 2

Match the following statements.
-Unrelated business income is generally that derived from the unrelated trade or business, reduced by the deductions directly connected with the conduct of the unrelated trade or business.

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. E

Question 3

To what types of organizations does the UBIT apply?

Accepted Answer

The UBIT applies to all organizations that are exempt from Federal income tax under § 501(c), except for Federal agencies.

Question 4

Unrelated debt-financed income, net of the unrelated debt-financed deductions, is subject to the unrelated business income tax only if the exempt organization is a private foundation.

Accepted Answer

A) True 
 B)False

Question 5

One of the requirements for an exempt organization being classified as an unrelated trade or business is that the trade or business is not substantially related to the exempt purpose of the organization. How can an exempt organization avoid satisfying this requirement?

Accepted Answer

To avoid satisfying this requirement, th

Question 6

If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt organizations the organization's donor or membership list, such trade or business is an unrelated trade or business.

Accepted Answer

A) True 
 B)False

Question 7

Discuss benefits for which an exempt organization may be eligible, other than exemption from Federal income tax.

Accepted Answer

In addition to being exempt from Federal

Question 8

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 9

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) 10% initial tax and 25% additional tax on private foundation. 
B) 30% initial tax and 100% additional tax on private foundation. 
C) 10% initial tax and 200% additional tax on private foundation. 
D) 10% initial tax and 200% additional tax on the disqualified person. 
A) 10% initial tax and 25% additional tax on private foundation. 
B) 30% initial tax and 100% additional tax on private foundation. 
C) 10% initial tax and 200% additional tax on private foundation. 
D) 10% initial tax and 200% additional tax on the disqualified person.

Question 10

Which of the following is not an example of an exempt organization?

Accepted Answer

A) Religious, charitable, or educational organization. 
B) Voluntary employees' beneficiary association. 
C) Labor, agricultural, or horticultural organization. 
D) Stock exchange. 
E) All of the above can be exempt from tax. 
A) Religious, charitable, or educational organization. 
B) Voluntary employees' beneficiary association. 
C) Labor, agricultural, or horticultural organization. 
D) Stock exchange. 
E) All of the above can be exempt from tax.

Question 11

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 12

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 13

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 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 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 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Question 16

Match the following statements.
-The trade or business consists of selling merchandise, and substantially all of the merchandise has been received as gifts or contributions.

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 17

George is running for mayor of Culpepper. The members of Third Church adamantly oppose his candidacy. They would like to run a political advertisement in the local newspaper opposing his candidacy. The newspaper ad would have no effect on Third Church's exempt status because the ad opposes George; it does not support his opponent.

Accepted Answer

A) True 
 B)False

Question 18

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 adequate amounts of income

Accepted Answer

A) 10% initial tax and 25% additional tax on private foundation. 
B) 30% initial tax and 100% additional tax on private foundation. 
C) 10% initial tax and 200% additional tax on private foundation. 
D) 10% initial tax and 200% additional tax on the disqualified person. 
A) 10% initial tax and 25% additional tax on private foundation. 
B) 30% initial tax and 100% additional tax on private foundation. 
C) 10% initial tax and 200% additional tax on private foundation. 
D) 10% initial tax and 200% additional tax on the disqualified person.

Question 19

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 20

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.

Match the following tax forms. -Form 1024

Match the following statements. -Unrelated business income is generally that derived from the unrelated trade or business, reduced by the deductions directly connected with the conduct of the unrelated trade or business.

To what types of organizations does the UBIT apply?

Unrelated debt-financed income, net of the unrelated debt-financed deductions, is subject to the unrelated business income tax only if the exempt organization is a private foundation.

One of the requirements for an exempt organization being classified as an unrelated trade or business is that the trade or business is not substantially related to the exempt purpose of the organization. How can an exempt organization avoid satisfying this requirement?

If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt organizations the organization's donor or membership list, such trade or business is an unrelated trade or business.

Discuss benefits for which an exempt organization may be eligible, other than exemption from Federal income tax.

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

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

Which of the following is not an example of an exempt organization?

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)(3) organization

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

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

Match the following statements. -The trade or business consists of selling merchandise, and substantially all of the merchandise has been received as gifts or contributions.

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 adequate amounts of income

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.

Match the following statements. -Form 990-PF.

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

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 15: Exempt Entities

Match the following tax forms. -Form 1024

Match the following statements. -Unrelated business income is generally that derived from the unrelated trade or business, reduced by the deductions directly connected with the conduct of the unrelated trade or business.

To what types of organizations does the UBIT apply?

Unrelated debt-financed income, net of the unrelated debt-financed deductions, is subject to the unrelated business income tax only if the exempt organization is a private foundation.

One of the requirements for an exempt organization being classified as an unrelated trade or business is that the trade or business is not substantially related to the exempt purpose of the organization. How can an exempt organization avoid satisfying this requirement?

If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt organizations the organization's donor or membership list, such trade or business is an unrelated trade or business.

Discuss benefits for which an exempt organization may be eligible, other than exemption from Federal income tax.

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

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

Which of the following is not an example of an exempt organization?

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)(3) organization

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

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

Match the following statements. -The trade or business consists of selling merchandise, and substantially all of the merchandise has been received as gifts or contributions.

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 adequate amounts of income

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.

Match the following statements. -Form 990-PF.

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

Multi-State Corporate Taxations

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters