Question 1

Match the following statements.
-Membership lists

Accepted Answer

A) Distribution of such items is not considered an unrelated trade or business if they are "low-cost items". 
B) Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events 
C) Is considered an unrelated trade or business if legally it can be conducted by commercial for-profit) entities. 
D) A trade or business that consists of either renting or exchanging these with another exempt organization is not
an unrelated trade or business. 
A) Distribution of such items is not considered an unrelated trade or business if they are "low-cost items". 
B) Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events 
C) Is considered an unrelated trade or business if legally it can be conducted by commercial for-profit) entities. 
D) A trade or business that consists of either renting or exchanging these with another exempt organization is not
an unrelated trade or business.

Question 2

Match the following tax forms.
-Form 1023

Accepted Answer

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

Question 3

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 in computing net unrelated business income?

Accepted Answer

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

Question 4

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 5

Match the following tax forms.
-Form 1024

Accepted Answer

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

Question 6

Match the following statements.
-The trade or business is not substantially related to the exempt purpose of the organization.

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

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 these statements are correct. 
E)  None of these 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 these statements are correct. 
E)  None of these statements is correct.

Question 8

A feeder organization is exempt from Federal income taxation because it carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt entity.

Accepted Answer

A) True 
 B)False

Question 9

The Form 990-N:

Accepted Answer

A)  Is filed by new exempt entities. 
B)  Records the asset holdings and liabilities of the exempt organization. 
C)  Is also known as the e-Postcard. 
D)  No longer exists. 
A)  Is filed by new exempt entities. 
B)  Records the asset holdings and liabilities of the exempt organization. 
C)  Is also known as the e-Postcard. 
D)  No longer exists.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Miracle, Inc., is a § 501c)3) organization involved in medical research. Based on its expectation that proposed legislation will adversely affect the funding supporting its mission, Miracle hires a lobbyist to work in Washington to represent its views.
Miracle is eligible for and thus makes the § 501h) election. It calculates the lobbying nontaxable amount to be
$100,000 $500,000 exempt purpose expenditures × 20%). The total lobbying expenditures for the year were
$115,000. Calculate Miracle's tax on excess lobbying expenditures.

Accepted Answer

Since Miracle's lobbying expenses of $11

Question 12

Matching
Give an example of the indicated types of exempt organizations.
-§ 501c)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 13

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 14

Plus Inc. is a § 501c)3) organization. It generates a small amount of net income each year. Ralph, the CEO of Plus is concerned that Plus may be subject to the unrelated business income tax. Is there a materiality exception to this tax?

Accepted Answer

Yes. The materiality exception

Question 15

Certain § 501c)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 16

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Accepted Answer

A)  $0. 
B)  $150,000. 
C)  $600,000. 
D)  $900,000. 
A)  $0. 
B)  $150,000. 
C)  $600,000. 
D)  $900,000.

Question 17

Blue, Inc., receives its support from the following sources. Governmental unit A for services rendered $18,000
General public for services rendered 25,000
Gross investment income 8,000
Contributions from individual disqualified persons 19,000
Which of the following statements is correct?

Accepted Answer

A)  Blue is a private foundation because it satisfies the external support test and fails the internal support test. 
B)  Blue is not a private foundation because it fails both the internal and external support tests. 
C)  Blue is a private foundation because it satisfies both the external support test and the internal support test. 
D)  Blue is not a private foundation because it satisfies both the external support test and the internal support test. 
A)  Blue is a private foundation because it satisfies the external support test and fails the internal support test. 
B)  Blue is not a private foundation because it fails both the internal and external support tests. 
C)  Blue is a private foundation because it satisfies both the external support test and the internal support test. 
D)  Blue is not a private foundation because it satisfies both the external support test and the internal support test.

Question 18

Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

Accepted Answer

A)  $-0-. 
B)  $13,000. 
C)  $14,000. 
D)  $20,000. 
A)  $-0-. 
B)  $13,000. 
C)  $14,000. 
D)  $20,000.

Question 19

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 20

Matching
Give an example of the indicated types of exempt organizations.
-§ 501c)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.

Match the following statements. -Membership lists

Match the following tax forms. -Form 1023

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

Match the following tax forms. -Form 1024

Match the following statements. -The trade or business is not substantially related to the exempt purpose of the organization.

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

A feeder organization is exempt from Federal income taxation because it carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt entity.

The Form 990-N:

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

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

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

Plus Inc. is a § 501c)3) organization. It generates a small amount of net income each year. Ralph, the CEO of Plus is concerned that Plus may be subject to the unrelated business income tax. Is there a materiality exception to this tax?

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

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Blue, Inc., receives its support from the following sources. Governmental unit A for services rendered $18,000 General public for services rendered 25,000 Gross investment income 8,000 Contributions from individual disqualified persons 19,000 Which of the following statements is correct?

Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

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?

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

Understanding and Working With the Federal Tax Law

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, 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

Match the following statements. -Membership lists

Match the following tax forms. -Form 1023

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

Match the following tax forms. -Form 1024

Match the following statements. -The trade or business is not substantially related to the exempt purpose of the organization.

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

A feeder organization is exempt from Federal income taxation because it carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt entity.

The Form 990-N:

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

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

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

Plus Inc. is a § 501c)3) organization. It generates a small amount of net income each year. Ralph, the CEO of Plus is concerned that Plus may be subject to the unrelated business income tax. Is there a materiality exception to this tax?

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

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Blue, Inc., receives its support from the following sources. Governmental unit A for services rendered $18,000 General public for services rendered 25,000 Gross investment income 8,000 Contributions from individual disqualified persons 19,000 Which of the following statements is correct?

Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

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?

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

Understanding and Working With the Federal Tax Law

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, 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