Question 1

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

Accepted Answer

The excise taxes imposed on private foun

Question 2

The excise tax that is imposed on private foundations for making jeopardizing investments is imposed because the foundation has made speculative investments that put the foundation's income at risk.

Accepted Answer

A) True 
 B)False

Question 3

Match the following tax forms.
a.Return of Private Foundation.
b.Application for Recognition of Exemption under § 501(c)(3).
c.Return of Organization Exempt from Income Tax.
d.Return of Certain Excise Taxes on Charities and Other Persons.
e.Application for Recognition of Exemption under § 501(a).
f.Application for Extension of Time.
-Form 1023

Accepted Answer

The answer of Match the following tax forms.
a.Return of Private...

Question 4

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 included in the requirements?

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 ten 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. 
E) All of the above are requirements. 
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 ten 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. 
E) All of the above are requirements.

Question 5

Define a private foundation.

Accepted Answer

The following § 501(c)(3)organizations a

Question 6

For the unrelated business income tax to be imposed on an exempt organization,which of the following is not a factor that must be present?

Accepted Answer

A) The trade or business is not substantially related to the exempt purpose of the organization. 
B) The organization is a private foundation. 
C) The trade or business is regularly carried on by the organization. 
D) The organization conducts a trade or business. 
E) All of the factors must be present for the tax to be imposed. 
A) The trade or business is not substantially related to the exempt purpose of the organization. 
B) The organization is a private foundation. 
C) The trade or business is regularly carried on by the organization. 
D) The organization conducts a trade or business. 
E) All of the factors must be present for the tax to be imposed.

Question 7

What are the common characteristics of organizations that receive exempt status?

Accepted Answer

Many organizations t

Question 8

Which of the following § 501(c)(3)exempt organizations is appropriately classified as a private foundation?

Accepted Answer

A) Cincinnati Memorial Hospital. 
B) University of Arizona. 
C) Bill and Melinda Gates Foundation. 
D) United Fund. 
E) All of the above. 
A) Cincinnati Memorial Hospital. 
B) University of Arizona. 
C) Bill and Melinda Gates Foundation. 
D) United Fund. 
E) All of the above.

Question 9

Which of the following qualify as exempt organizations?

Accepted Answer

A) Federal and related agencies. 
B) Religious, charitable, and educational organizations. 
C) Civic leagues. 
D) Social clubs. 
E) All of the above can be exempt from tax. 
A) Federal and related agencies. 
B) Religious, charitable, and educational organizations. 
C) Civic leagues. 
D) Social clubs. 
E) All of the above can be exempt from tax.

Question 10

If an organization qualifies for exempt status for Federal income tax purposes,it is exempt from all Federal income taxes.

Accepted Answer

A) True 
 B)False

Question 11

Hotel,Inc.,is a feeder organization for Museum,Inc.,an exempt organization.Hotel,Inc.,provides approximately 25% of the support needed by Museum,Inc.,to carry out its tax-exempt mission.Which of the following statements is correct?

Accepted Answer

A) Only Museum, Inc., is subject to Federal income taxation. 
B) Both Museum, Inc., and Hotel, Inc., are subject to Federal income taxation. 
C) Hotel, Inc., is subject to Federal income taxation on all of its income and Museum, Inc., is subject to Federal income taxation on 25% of its income. 
D) Only Hotel, Inc., is subject to Federal income taxation. 
E) None of the statements is correct. 
A) Only Museum, Inc., is subject to Federal income taxation. 
B) Both Museum, Inc., and Hotel, Inc., are subject to Federal income taxation. 
C) Hotel, Inc., is subject to Federal income taxation on all of its income and Museum, Inc., is subject to Federal income taxation on 25% of its income. 
D) Only Hotel, Inc., is subject to Federal income taxation. 
E) None of the statements is correct.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

Match the following statements.
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 which is not a private foundation.
e.Appropriate definition.
f.Annual information return of a private foundation.
-Form 990-PF.

Accepted Answer

The answer of Match the following statements.
a.Exempt from tax on...

Question 15

Why are some organizations exempt from Federal income tax?

Accepted Answer

The Code's treatment of exempt organizat

Question 16

Nice,Inc.,a § 501(c)(3)organization,inherited 100% of the stock of Aggressive,Inc.,a for-profit entity,at the beginning of the year.Although Nice plans on selling the stock of Aggressive,a buyer has not yet been located.Aggressive's taxable income for the year is $900,000.Aggressive distributed a dividend of $525,000 to Nice at the beginning of December.Determine the tax consequences for the taxable income and the dividend payment:
a.To Aggressive, Inc.
b.To Nice, Inc.

Accepted Answer

a.Aggressive,Inc.,is a feeder organizati

Question 17

Soft,Inc.,a § 501(c)(3)organization,has been leasing a building to Polar,Inc.,a taxable entity,for 15 years.The lease terminates in the current tax year.Soft's adjusted basis for the building is $225,000.It sells the building to the Development Partnership,a taxable entity,for $440,000.Selling expenses are $14,000.
a.Calculate the effect of the sale on Soft's UBTI.
b.Assume instead that Development Partnership is a tax-exempt entity. Calculate the effect of the sale on Soft's UBTI.

Accepted Answer

The answer of Soft,Inc.,a § 501(c)(3)organization,has been leasing a building...

Question 18

Tan,Inc.,a tax-exempt organization,has $65,000 of net unrelated business income.Total charitable contributions (all associated with the unrelated trade or business)are $7,500.Assuming that the $7,500 was deducted in calculating net unrelated business income,what is Tan's unrelated business taxable income?

Accepted Answer

A) $57,500. 
B) $65,250. 
C) $66,000. 
D) $72,500. 
E) Some other amount. 
A) $57,500. 
B) $65,250. 
C) $66,000. 
D) $72,500. 
E) Some other amount.

Question 19

Match the following statements.
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 which is not a private foundation.
e.Appropriate definition.
f.Annual information return of a private foundation.
-Form 990.

Accepted Answer

The answer of Match the following statements.
a.Exempt from tax on...

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

The excise tax that is imposed on private foundations for making jeopardizing investments is imposed because the foundation has made speculative investments that put the foundation's income at risk.

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 included in the requirements?

Define a private foundation.

For the unrelated business income tax to be imposed on an exempt organization,which of the following is not a factor that must be present?

What are the common characteristics of organizations that receive exempt status?

Which of the following § 501(c)(3)exempt organizations is appropriately classified as a private foundation?

Which of the following qualify as exempt organizations?

If an organization qualifies for exempt status for Federal income tax purposes,it is exempt from all Federal income taxes.

Hotel,Inc.,is a feeder organization for Museum,Inc.,an exempt organization.Hotel,Inc.,provides approximately 25% of the support needed by Museum,Inc.,to carry out its tax-exempt mission.Which of the following statements is correct?

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

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

Why are some organizations exempt from Federal income tax?

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

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

The excise tax that is imposed on private foundations for making jeopardizing investments is imposed because the foundation has made speculative investments that put the foundation's income at risk.

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 included in the requirements?

Define a private foundation.

For the unrelated business income tax to be imposed on an exempt organization,which of the following is not a factor that must be present?

What are the common characteristics of organizations that receive exempt status?

Which of the following § 501(c)(3)exempt organizations is appropriately classified as a private foundation?

Which of the following qualify as exempt organizations?

If an organization qualifies for exempt status for Federal income tax purposes,it is exempt from all Federal income taxes.

Hotel,Inc.,is a feeder organization for Museum,Inc.,an exempt organization.Hotel,Inc.,provides approximately 25% of the support needed by Museum,Inc.,to carry out its tax-exempt mission.Which of the following statements is correct?

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

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

Why are some organizations exempt from Federal income tax?

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