Question 1

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 2

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax.
a.5% initial tax and 25% additional tax on private foundation.
b.15% initial tax and 100% additional tax on private foundation.
c.100% additional tax on private foundation and 50% additional tax on foundation manager.
d.5% initial tax and 200% additional tax on private foundation.
e.5% initial tax and 200% additional tax on the disqualified person.
-Tax on jeopardizing investments

Accepted Answer

The answer of For each of the following taxes which...

Question 3

Private foundations are not permitted to engage in lobbying activities.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Which of the following are available options for the IRS in dealing with an exempt organization entering into prohibited transactions?

Accepted Answer

A) Attempt to subject all or part of the organization's income to Federal income tax. 
B) Revoke the exempt status of the organization. 
C) Impose intermediate sanctions in the form of excise taxes. 
D) Only a.and b. 
E) a.,b.,and c. 
A) Attempt to subject all or part of the organization's income to Federal income tax. 
B) Revoke the exempt status of the organization. 
C) Impose intermediate sanctions in the form of excise taxes. 
D) Only a.and b. 
E) a.,b.,and c.

Question 6

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Accepted Answer

A) True 
 B)False

Question 7

Receiving too little of its support from gross investment income and unrelated business taxable income can result in an exempt organization being classified as a private foundation.

Accepted Answer

A) True 
 B)False

Question 8

A general requirement for exempt status is that the net earnings of the organization not be used for the benefit of the members of the organization.

Accepted Answer

A) True 
 B)False

Question 9

Match the following statements with the correct description.
a.Exempt organization under § 501(c)(3).
b.May not be subject to Federal income tax.
c.Permits limited lobbying activities.
d.Exempt organization under § 501(c)(7).
e.Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.
-Kentwood Rodeo Club

Accepted Answer

The answer of Match the following statements with the correct...

Question 10

Orange,Inc.,a private foundation,engages in a transaction with a disqualified person in the amount of $800,000.Calculate the tax on self-dealing.Assume that corrective action is taken so that the additional tax does not apply.

Accepted Answer

The initial tax on the disqualified pers

Question 11

Intermediate sanctions enable the IRS to revoke the exempt status of an exempt organization for a negotiated time period.

Accepted Answer

A) True 
 B)False

Question 12

Even though substantially all the work of an unrelated trade or business is performed by volunteers,it can be subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Question 13

Watch,Inc.,a § 501(c)(3)exempt organization,solicits contributions through a mail campaign.An executive,who recently completed an executive MBA degree program,recommends that personal address labels be included as an additional way to motivate the potential donor to contribute.The value of these labels is $7.25 per potential donor.What is the effect of the inclusion of the address labels on Watch's unrelated business income?

Accepted Answer

The address labels are low cost articles

Question 14

Match the following statements.
a.Carries on a trade or business for the benefit of an exempt organization, remits its profits to the exempt organization, and is not exempt from Federal income tax.
b.May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.
c.Tax imposed for engaging in transactions with disqualified persons.
d.Enables certain exempt organizations to engage in lobbying activities on a limited basis.
e.Tax imposed on investments that enable a private foundation to control unrelated businesses.
-Tax on self-dealing

Accepted Answer

The answer of Match the following statements.
a.Carries on a trade...

Question 15

Well,Inc.,a private foundation,makes a speculative investment of $500,000 that puts the foundation assets at risk.Calculate the tax on jeopardizing investments.Assume that corrective action is taken so that the additional tax does not apply.

Accepted Answer

The initial tax on the private

Question 16

Match the following statements with the correct description.
a.Exempt organization under § 501(c)(3).
b.May not be subject to Federal income tax.
c.Permits limited lobbying activities.
d.Exempt organization under § 501(c)(7).
e.Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.
-§ 501(h)

Accepted Answer

The answer of Match the following statements with the correct...

Question 17

Under what part of § 501(c)are most organizations exempt from Federal income taxation?

Accepted Answer

Most organizations that are exempt from

Question 18

What is a feeder organization? How is it taxed?

Accepted Answer

A feeder organization is a taxable entit

Question 19

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?

Accepted Answer

A) Debt incurred in acquiring or improving the property. 
B) Debt incurred to enable the organization to carry out its exempt purpose. 
C) Debt incurred to enable the exempt organization to acquire a feeder organization. 
D) Only a.and b. 
E) a.,b.,and c. 
A) Debt incurred in acquiring or improving the property. 
B) Debt incurred to enable the organization to carry out its exempt purpose. 
C) Debt incurred to enable the exempt organization to acquire a feeder organization. 
D) Only a.and b. 
E) a.,b.,and c.

Question 20

Match the following statements.
a.Distribution of such items is not considered an unrelated trade or business if the value does not exceed $9.10 in 2008.
b.Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events.
c.Is considered an unrelated trade or business if 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.
-Bingo games

Accepted Answer

The answer of Match the following statements.
a.Distribution of such items...

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

Private foundations are not permitted to engage in lobbying activities.

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

Which of the following are available options for the IRS in dealing with an exempt organization entering into prohibited transactions?

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Receiving too little of its support from gross investment income and unrelated business taxable income can result in an exempt organization being classified as a private foundation.

A general requirement for exempt status is that the net earnings of the organization not be used for the benefit of the members of the organization.

Orange,Inc.,a private foundation,engages in a transaction with a disqualified person in the amount of $800,000.Calculate the tax on self-dealing.Assume that corrective action is taken so that the additional tax does not apply.

Intermediate sanctions enable the IRS to revoke the exempt status of an exempt organization for a negotiated time period.

Even though substantially all the work of an unrelated trade or business is performed by volunteers,it can be subject to the unrelated business income tax (UBIT).

Well,Inc.,a private foundation,makes a speculative investment of $500,000 that puts the foundation assets at risk.Calculate the tax on jeopardizing investments.Assume that corrective action is taken so that the additional tax does not apply.

Under what part of § 501(c)are most organizations exempt from Federal income taxation?

What is a feeder organization? How is it taxed?

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

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, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 14: Exempt Entities

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

Private foundations are not permitted to engage in lobbying activities.

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

Which of the following are available options for the IRS in dealing with an exempt organization entering into prohibited transactions?

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Receiving too little of its support from gross investment income and unrelated business taxable income can result in an exempt organization being classified as a private foundation.

A general requirement for exempt status is that the net earnings of the organization not be used for the benefit of the members of the organization.

Orange,Inc.,a private foundation,engages in a transaction with a disqualified person in the amount of $800,000.Calculate the tax on self-dealing.Assume that corrective action is taken so that the additional tax does not apply.

Intermediate sanctions enable the IRS to revoke the exempt status of an exempt organization for a negotiated time period.

Even though substantially all the work of an unrelated trade or business is performed by volunteers,it can be subject to the unrelated business income tax (UBIT).

Well,Inc.,a private foundation,makes a speculative investment of $500,000 that puts the foundation assets at risk.Calculate the tax on jeopardizing investments.Assume that corrective action is taken so that the additional tax does not apply.

Under what part of § 501(c)are most organizations exempt from Federal income taxation?

What is a feeder organization? How is it taxed?

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

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, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters