Question 1

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 2

Give an example of the indicated types of exempt organizations.
-§ 501(c)(5) labor 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

All organizations that are exempt from Federal income tax are exempt under § 501(c)(3).

Accepted Answer

A) True 
 B)False

Question 4

Even though a church is not required to obtain IRS approval of its exempt status, it still annually must file a Form 990.

Accepted Answer

A) True 
 B)False

Question 5

Why are some organizations exempt from Federal income tax?

Accepted Answer

The Code's treatment of exempt organizat

Question 6

All exempt organizations which are subject to the unrelated business income tax must file Form 990-T (Exempt Organization Business Income Tax Return).

Accepted Answer

A) True 
 B)False

Question 7

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 8

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

Question 9

Certain § 501(c)(3) exempt organizations are permitted to engage in lobbying activities in the same manner as a C corporation.

Accepted Answer

A) True 
 B)False

Question 10

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) 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 11

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

Accepted Answer

No. Such organizations may be only parti

Question 12

City, Inc., an exempt organization, has included among other amounts the following in calculating net unrelated business income of $500,000. $$\begin{array} { l r } 
\text { Dividend income } & \$ 12,000 \
\text { Interest income } & 6,000 \
\text { Royal ty income } & 15,000 \
\text { Rent income from } & \
\text { equipment } & 25,000
\end{array}$$ 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

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

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 15

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

Accepted Answer

A) True 
 B)False

Question 16

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

Accepted Answer

If the following requirements are satisf

Question 17

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 self-dealing

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 18

Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year. $$\begin{array} { l r } 
\text { General public for services rendered } & \$ 22,000 \
\text { Governmental unit A for services rendered } & 30,000 \
\text { Governmental unit B for services rendered } & 3,000 \
\text { Governmental unit C for services rendered } & 8,000 \
\text { Gross investment income } & 19,000 \
\text { Contributions from individual substantial contributors (disqualified } & 18,000 \
\text { persons) } &
\end{array}$$ Is Assist, Inc., classified as a private foundation?

Accepted Answer

To not be classified as a private founda

Question 19

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

Accepted Answer

A) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization. 
B) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization. 
C) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year. 
D) An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT. 
E) None of the above statements is correct. 
A) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization. 
B) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization. 
C) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year. 
D) An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT. 
E) None of the above statements is correct.

Question 20

Medical, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction, such that the intermediate sanctions rules may apply. 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

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

Give an example of the indicated types of exempt organizations. -§ 501(c)(5) labor organization

All organizations that are exempt from Federal income tax are exempt under § 501(c)(3).

Even though a church is not required to obtain IRS approval of its exempt status, it still annually must file a Form 990.

Why are some organizations exempt from Federal income tax?

All exempt organizations which are subject to the unrelated business income tax must file Form 990-T (Exempt Organization Business Income Tax Return).

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

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

Certain § 501(c)(3) exempt organizations are permitted to engage in lobbying activities in the same manner as a C corporation.

Match the following tax forms. -Form 990

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

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

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.

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

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 self-dealing

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

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

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

Give an example of the indicated types of exempt organizations. -§ 501(c)(5) labor organization

All organizations that are exempt from Federal income tax are exempt under § 501(c)(3).

Even though a church is not required to obtain IRS approval of its exempt status, it still annually must file a Form 990.

Why are some organizations exempt from Federal income tax?

All exempt organizations which are subject to the unrelated business income tax must file Form 990-T (Exempt Organization Business Income Tax Return).

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

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

Certain § 501(c)(3) exempt organizations are permitted to engage in lobbying activities in the same manner as a C corporation.

Match the following tax forms. -Form 990

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

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

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.

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

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 self-dealing

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

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