Question 1

Which of the following statements is correct?

Accepted Answer

A) For an exempt organization not to be classified as a private foundation under the broadly supported provision, both the external support test and the internal support test must be satisfied. 
B) For an exempt organization not to be classified as a private foundation under the broadly supported provision, both the external support test and the internal support test must be failed. 
C) For an exempt organization not to be classified as a private foundation under the broadly supported provision, the external support test must be satisfied and the internal support test must be failed. 
D) For an exempt organization not to be classified as a private foundation under the broadly supported provision, the external support test must be failed and the internal support test must be passed. 
E) None of the above statements is correct. 
A) For an exempt organization not to be classified as a private foundation under the broadly supported provision, both the external support test and the internal support test must be satisfied. 
B) For an exempt organization not to be classified as a private foundation under the broadly supported provision, both the external support test and the internal support test must be failed. 
C) For an exempt organization not to be classified as a private foundation under the broadly supported provision, the external support test must be satisfied and the internal support test must be failed. 
D) For an exempt organization not to be classified as a private foundation under the broadly supported provision, the external support test must be failed and the internal support test must be passed. 
E) None of the above statements is correct.

Question 2

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 3

An exempt entity in no circumstance is subject to Federal income tax.

Accepted Answer

A) True 
 B)False

Question 4

What income and activities are not subject to the feeder organization rules?

Accepted Answer

The following income

Question 5

Which of the following are qualified corporate sponsorship payments?

Accepted Answer

A) The amount of the payment by the corporation to the exempt organization is contingent on the attendance at one or more events. 
B) The payment by the corporation to the exempt organization results in only a half-page advertisement in the event program. 
C) The payment by the corporation to the exempt organization results in the corporate logo appearing in the exempt organization's monthly newsletter. 
D) Only b.and c. 
E) a., b., and c. 
A) The amount of the payment by the corporation to the exempt organization is contingent on the attendance at one or more events. 
B) The payment by the corporation to the exempt organization results in only a half-page advertisement in the event program. 
C) The payment by the corporation to the exempt organization results in the corporate logo appearing in the exempt organization's monthly newsletter. 
D) Only b.and c. 
E) a., b., and c.

Question 6

Are some exempt organizations eligible to be recipients of contributions for which the donor does not qualify for a charitable contribution deduction?

Accepted Answer

Yes.For example, contributions

Question 7

Blue, Inc., receives its support from the following sources.   Which of the following statements is correct?

Accepted Answer

A) Blue, Inc., is a private foundation because it satisfies the external support test and fails the internal support test. 
B) Blue, Inc., is not a private foundation because it fails both the internal and external support tests. 
C) Blue, Inc., is a private foundation because it satisfies both the external support test and the internal support test. 
D) Blue, Inc., is not a private foundation because it satisfies both the external support test and the internal support test. 
E) None of the statements is true. 
A) Blue, Inc., is a private foundation because it satisfies the external support test and fails the internal support test. 
B) Blue, Inc., is not a private foundation because it fails both the internal and external support tests. 
C) Blue, Inc., is a private foundation because it satisfies both the external support test and the internal support test. 
D) Blue, Inc., is not a private foundation because it satisfies both the external support test and the internal support test. 
E) None of the statements is true.

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

Which of the following statements regarding exempt organization filing requirements is incorrect?

Accepted Answer

A) Churches are required to file Form 990 (Return of Organization Exempt from Income Tax) only if its annual gross receipts exceed $50,000. 
B) The due date for Form 990 (Return of Organization Exempt from Income Tax) is the fifteenth day of the fifth month after the end of the taxable year, whereas for private foundations the due date for Form 990-PF (Return of Private Foundation) is the fifteenth day of the fourth month after the end of the tax year. 
C) Exempt organizations whose annual gross receipts do not exceed $50,000 can file an e-Postcard. 
D) Only a.and b.are incorrect. 
E) a., b., and c.are incorrect. 
A) Churches are required to file Form 990 (Return of Organization Exempt from Income Tax) only if its annual gross receipts exceed $50,000. 
B) The due date for Form 990 (Return of Organization Exempt from Income Tax) is the fifteenth day of the fifth month after the end of the taxable year, whereas for private foundations the due date for Form 990-PF (Return of Private Foundation) is the fifteenth day of the fourth month after the end of the tax year. 
C) Exempt organizations whose annual gross receipts do not exceed $50,000 can file an e-Postcard. 
D) Only a.and b.are incorrect. 
E) a., b., and c.are incorrect.

Question 10

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

Accepted Answer

No. Such organizations may be only parti

Question 11

Identify the components of the tax model for unrelated business taxable income.

Accepted Answer

The tax model for unrelated bu

Question 12

Which of the following requirements must be satisfied for a bingo game to be classified as not being an unrelated trade or business?

Accepted Answer

A) The bingo game is legal under both state and local law. 
B) The bingo game is conducted by volunteers. 
C) For-profit bingo games ordinarily are not permitted in the jurisdiction. 
D) Only a.and b.must be satisfied. 
E) Only a.and c.must be satisfied. 
A) The bingo game is legal under both state and local law. 
B) The bingo game is conducted by volunteers. 
C) For-profit bingo games ordinarily are not permitted in the jurisdiction. 
D) Only a.and b.must be satisfied. 
E) Only a.and c.must be satisfied.

Question 13

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 14

To maintain exempt status, an organization must do which of the following:

Accepted Answer

A) Satisfy only an organizational test. 
B) Satisfy only an operational test. 
C) Satisfy both an organizational test and an operational test. 
D) Satisfy a financial test. 
E) Once exempt status is granted, it will continue regardless of whether the organizational test and the operational test are satisfied. 
A) Satisfy only an organizational test. 
B) Satisfy only an operational test. 
C) Satisfy both an organizational test and an operational test. 
D) Satisfy a financial test. 
E) Once exempt status is granted, it will continue regardless of whether the organizational test and the operational test are satisfied.

Question 15

Amber, Inc., an exempt organization, reports unrelated business taxable income of $300,000. Total charitable contributions are $35,000, of which $31,000 (associated with the unrelated trade or business) has been deducted in calculating net unrelated business income. Calculate Amber's positive and negative adjustments in calculating unrelated business taxable income.

Accepted Answer

Since the $31,000 has been deducted in c

Question 16

Loyal, Inc., is a §501(c)(3) organization that is not classified as a private foundation.During the current year, it is subject to intermediate sanctions.What other options does the IRS have in dealing with an exempt organization engaging in prohibited transactions?

Accepted Answer

The IRS has two other options available

Question 17

Which of the following is a requirement for exempt status?

Accepted Answer

A) The organization does not exert political influence. 
B) The organization has not been subject to intermediate sanctions for the past 3 taxable years. 
C) The organization serves some type of common good. 
D) Only a.and c. 
E) a., b., and c. 
A) The organization does not exert political influence. 
B) The organization has not been subject to intermediate sanctions for the past 3 taxable years. 
C) The organization serves some type of common good. 
D) Only a.and c. 
E) a., b., and c.

Question 18

Which of the following are organizations exempt under § 501(c)(3)?

Accepted Answer

A) Girl Scouts of America. 
B) Washington and Lee University. 
C) Veterans of Foreign Wars (VFW). 
D) Only a.and b.are § 501(c)(3) organizations. 
E) All of the above are § 501(c)(3) organizations. 
A) Girl Scouts of America. 
B) Washington and Lee University. 
C) Veterans of Foreign Wars (VFW). 
D) Only a.and b.are § 501(c)(3) organizations. 
E) All of the above are § 501(c)(3) organizations.

Question 19

Give an example of the indicated types of exempt organizations.

Accepted Answer

The answer of Give an example of the indicated types...

Question 20

An exempt organization is located in the state of Nevada.Gambling in Nevada is legal.Therefore, bingo games are conducted by both taxable and tax-exempt organizations.If the net earnings from the bingo games are less than $25,000, the exempt organization is not subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Exam 23: Exempt Entities

Which of the following statements is correct?

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

An exempt entity in no circumstance is subject to Federal income tax.

What income and activities are not subject to the feeder organization rules?

Which of the following are qualified corporate sponsorship payments?

Are some exempt organizations eligible to be recipients of contributions for which the donor does not qualify for a charitable contribution deduction?

Blue, Inc., receives its support from the following sources. Which of the following statements 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.

Which of the following statements regarding exempt organization filing requirements is incorrect?

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

Identify the components of the tax model for unrelated business taxable income.

Which of the following requirements must be satisfied for a bingo game to be classified as not being an unrelated trade or business?

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.

To maintain exempt status, an organization must do which of the following:

Loyal, Inc., is a §501(c)(3) organization that is not classified as a private foundation.During the current year, it is subject to intermediate sanctions.What other options does the IRS have in dealing with an exempt organization engaging in prohibited transactions?

Which of the following is a requirement for exempt status?

Which of the following are organizations exempt under § 501(c)(3)?

Give an example of the indicated types of exempt organizations.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

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