Question 1

The due date for the Exempt Organization Business Income Tax Return Form 990-T) is the fifteenth day of the third month after the end of the taxable year.

Accepted Answer

A) True 
 B)False

Question 2

Define a qualified corporate sponsorship payment.

Accepted Answer

A payment qualifies as a qualified spons

Question 3

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 a flat 30% income tax rate. 
E)  All of these 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 a flat 30% income tax rate. 
E)  All of these statements are correct.

Question 4

Theater, Inc., an exempt organization, owns a printing company, Printers, Inc., that remits 85% of its profits i.e., taxable income of $100,000) to Theater. Since Printers remits at least 85% of its profits to Theater, neither Theater, nor Printers, must pay income tax on this $85,000 $100,000 × 85%).

Accepted Answer

A) True 
 B)False

Question 5

Match the following tax forms.
-Form 990-PF

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

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 7

Match the following statements.
-Bingo games

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 8

If an exempt organization conducts a trade or business that is regularly carried on by the organization when 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 9

Match the following statements.
-Private foundation

Accepted Answer

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

Question 10

Teal, Inc., is a private foundation that failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?

Accepted Answer

A)  An excise tax in the form of an initial tax at the rate of 10% may be imposed on Teal. 
B)  An excise tax in the form of an initial tax at the rate of 5% may be imposed on the foundation manager. 
C)  An excise tax in the form of an additional tax at the rate of 100% may be imposed on Teal. 
D)  An excise tax in the form of an additional tax at the rate of 50% may be imposed on the foundation manager. 
A)  An excise tax in the form of an initial tax at the rate of 10% may be imposed on Teal. 
B)  An excise tax in the form of an initial tax at the rate of 5% may be imposed on the foundation manager. 
C)  An excise tax in the form of an additional tax at the rate of 100% may be imposed on Teal. 
D)  An excise tax in the form of an additional tax at the rate of 50% may be imposed on the foundation manager.

Question 11

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 a requirement?

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 10 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. 
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 10 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.

Question 12

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.

Question 13

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 to the entity.

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 14

For each of the following taxes that 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 100% additional tax on disqualified person. 
E) 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 100% additional tax on disqualified person. 
E) 10% initial tax and 200% additional tax on the disqualified person.

Question 15

How can an exempt organization otherwise classified as a private foundation become a public charity?

Accepted Answer

An exempt organization that otherwise wo

Question 16

Define a private foundation.

Accepted Answer

By default, all exempt entities are priv

Question 17

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 three graduates. Calculate the amount of Rattler's unrelated business income from this activity.

Accepted Answer

The contest activity is not classified a

Question 18

Medical, Inc., a § 501c)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 supported by reasonable cause. Calculate the amount of the excise tax first-level tax only) imposed under the intermediate sanctions provision.

Accepted Answer

Under the intermediate sanctions provisi

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

An educational organization such as Williams College that is exempt under § 501c)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

The due date for the Exempt Organization Business Income Tax Return Form 990-T) is the fifteenth day of the third month after the end of the taxable year.

Define a qualified corporate sponsorship payment.

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

Match the following tax forms. -Form 990-PF

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

Match the following statements. -Bingo games

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

Match the following statements. -Private foundation

Teal, Inc., is a private foundation that failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?

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 a requirement?

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.

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 to the entity.

For each of the following taxes that are imposed on private foundations and/or foundation managers, match the appropriate initial tax or additional tax. -Tax on excess business holdings

How can an exempt organization otherwise classified as a private foundation become a public charity?

Define a private foundation.

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

An educational organization such as Williams College that is exempt under § 501c)3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

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

The due date for the Exempt Organization Business Income Tax Return Form 990-T) is the fifteenth day of the third month after the end of the taxable year.

Define a qualified corporate sponsorship payment.

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

Match the following tax forms. -Form 990-PF

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

Match the following statements. -Bingo games

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

Match the following statements. -Private foundation

Teal, Inc., is a private foundation that failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?

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 a requirement?

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.

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 to the entity.

For each of the following taxes that are imposed on private foundations and/or foundation managers, match the appropriate initial tax or additional tax. -Tax on excess business holdings

How can an exempt organization otherwise classified as a private foundation become a public charity?

Define a private foundation.

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

An educational organization such as Williams College that is exempt under § 501c)3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

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