Question 1

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 2

Only certain exempt organizations must obtain IRS approval to obtain exempt status.

Accepted Answer

A) True 
 B)False

Question 3

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 4

What are the excise taxes imposed on private foundations, and why are they imposed?

Accepted Answer

The excise taxes imposed on private foun

Question 5

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

Accepted Answer

First, a tax is levied on the

Question 6

If the unrelated business income of an exempt organization is $25,000 or less, the unrelated business income tax (UBIT) is $0.

Accepted Answer

A) True 
 B)False

Question 7

The League of Women Voters is a § 501(c)(3) organization.

Accepted Answer

A) True 
 B)False

Question 8

Unless the "widely available" provision is satisfied, a § 501(c)(3) exempt organization (excluding churches and private foundations) must make copies of the following available to the general public: Form 990 (Return of Organization Exempt from Income Tax) and Form 1023 [Application for Recognition of Exemption under § 501(c)(3)] or Form 1024 [Application for Recognition of Exemption under § 501(a)].

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Pearl Inc., a tax-exempt organization, leases land, building, and machinery to Purple Partnership for a 5-year period. The rental income from the land and building is $100,000, with related expenses of $40,000. The rental income from the machinery is $9,000, with related expenses of $3,000. What adjustment must be made to net unrelated business income?

Accepted Answer

The net rental income of $66,000 ($60,00

Question 11

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 12

Blue, Inc., receives its support from the following sources. $\begin{array}{lr}
\text { Governmental unit } A \text {, for services rendered } & \$ 18,000 \
\text { General public, for services rendered } & 25,000 \
\text { Gross investment income } & 8,000\\text { Contributions from individual substantial contributors (disqualified }\\text { persons) }&19,000
\end{array}$ Which of the following statements is correct?

Accepted Answer

A) Blue, Inc., is a private foundation because it satisfies the external support test and fails the internal support test. 
B) Blue, Inc., is not a private foundation because it fails both the internal and external support tests. 
C) Blue, Inc., is a private foundation because it satisfies both the external support test and the internal support test. 
D) Blue, Inc., is not a private foundation because it satisfies both the external support test and the internal support test. 
E) None of the statements is true. 
A) Blue, Inc., is a private foundation because it satisfies the external support test and fails the internal support test. 
B) Blue, Inc., is not a private foundation because it fails both the internal and external support tests. 
C) Blue, Inc., is a private foundation because it satisfies both the external support test and the internal support test. 
D) Blue, Inc., is not a private foundation because it satisfies both the external support test and the internal support test. 
E) None of the statements is true.

Question 13

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 14

What is the purpose of the "broadly supported" exception for an exempt organization being classified as a private foundation?

Accepted Answer

The intent of the external support test

Question 15

Rattler, Inc., an exempt organization, trains disabled individuals to design web pages. Rather than hold a traditional graduation exercise, the graduates compete in a web design contest. Such activities are held four times each year. An admission fee of $10 is charged to the general public to attend the contest. Eight hundred people attended the contest this year, and prizes of $2,000 were given to the top 3 graduates. Calculate the amount of Rattler's unrelated business income from this activity.

Accepted Answer

The contest activity is not classified a

Question 16

Match the following tax forms.
-Form 1023

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).

Question 17

Which exempt organizations are not required to file an annual Federal tax return?

Accepted Answer

The following exempt organizations need

Question 18

Personal property rental income is subject to and real property rental income is not subject to the unrelated business income tax.

Accepted Answer

A) True 
 B)False

Question 19

Match the following statements.
-Debt-financed income is the net income from investment assets.

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 20

Match the following statements.
-Tax on excess business holdings

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.

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

Only certain exempt organizations must obtain IRS approval to obtain exempt status.

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

What are the excise taxes imposed on private foundations, and why are they imposed?

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

If the unrelated business income of an exempt organization is $25,000 or less, the unrelated business income tax (UBIT) is $0.

The League of Women Voters is a § 501(c)(3) organization.

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

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

What is the purpose of the "broadly supported" exception for an exempt organization being classified as a private foundation?

Match the following tax forms. -Form 1023

Which exempt organizations are not required to file an annual Federal tax return?

Personal property rental income is subject to and real property rental income is not subject to the unrelated business income tax.

Match the following statements. -Debt-financed income is the net income from investment assets.

Match the following statements. -Tax on excess business holdings

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

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

Only certain exempt organizations must obtain IRS approval to obtain exempt status.

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

What are the excise taxes imposed on private foundations, and why are they imposed?

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

If the unrelated business income of an exempt organization is $25,000 or less, the unrelated business income tax (UBIT) is $0.

The League of Women Voters is a § 501(c)(3) organization.

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

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

What is the purpose of the "broadly supported" exception for an exempt organization being classified as a private foundation?

Match the following tax forms. -Form 1023

Which exempt organizations are not required to file an annual Federal tax return?

Personal property rental income is subject to and real property rental income is not subject to the unrelated business income tax.

Match the following statements. -Debt-financed income is the net income from investment assets.

Match the following statements. -Tax on excess business holdings

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