Question 1

What tax forms are used to apply for exempt status?

Accepted Answer

An organization that is exempt under § 5

Question 2

Midnight Basketball, Inc., an exempt organization that organizes and conducts basketball games for youths ages 10-13, receives a $50,000 contribution from Brown Shoe Company.Midnight agrees to put Brown's logo on the cover of its monthly newsletter.

Accepted Answer

The answer of Midnight Basketball, Inc., an exempt organization that...

Question 3

Sandy is the treasurer for Choose, Inc., a § 501(c)(3) organization.The CEO has indicated that he would like for the exempt organization to make a substantial contribution to an entity which is lobbying against a legislative position that would be detrimental to Choose, Inc.Describe for the CEO under what circumstances an exempt organization can be eligible to lobby.

Accepted Answer

Certain exempt organizations are permitt

Question 4

A private foundation is subject to which of the following taxes?

Accepted Answer

A) Tax on self-dealing. 
B) Tax on investments in publicly traded stock. 
C) Tax on taxable expenditures that jeopardize charitable purposes. 
D) Only a.and c. 
E) a., b., and c. 
A) Tax on self-dealing. 
B) Tax on investments in publicly traded stock. 
C) Tax on taxable expenditures that jeopardize charitable purposes. 
D) Only a.and c. 
E) a., b., and c.

Question 5

Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year.
   Is Assist, Inc., classified as a private foundation?

Accepted Answer

To not be classified as a private founda

Question 6

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 threatened loss of exempt status. 
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 threatened loss of exempt status. 
D) Only a.and b. 
E) a., b., and c.

Question 7

What is the purpose of the "broadly supported" exception for an exempt organization being classified as a private foundation?

Accepted Answer

The intent of the external support test

Question 8

Define a qualified corporate sponsorship payment.

Accepted Answer

A payment qualifies

Question 9

Even though a church is not required to obtain IRS approval of its exempt status, it still must file Form 990 (Return of Organization Exempt from Income Tax) annually.

Accepted Answer

A) True 
 B)False

Question 10

Woeful, Inc., a tax-exempt organization, leases a building and machinery to Purple Partnership.The rental income from the building is $180,000, with related expenses of $70,000.The rental income from the machinery is $12,000, with related expenses of $3,000.What adjustment must be made to net unrelated business income?

Accepted Answer

The net rental income of $119,000 ($110,

Question 11

Agnes is aware that a feeder organization is subject to Federal income taxation.She wonders whether an organization otherwise taxable as a feeder organization can avoid such status if it remits less than 80% of its profits to the § 501(c)(3) entity.

Accepted Answer

No.While a feeder organization carries o

Question 12

What are intermediate sanctions and to what types of exempt organizations do they apply?

Accepted Answer

Intermediate sanctions apply to so-calle

Question 13

Match the following statements.

Accepted Answer

The answer of Match the following statements.
  ...

Question 14

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

Accepted Answer

The excise taxes imposed on private foun

Question 15

Define average acquisition indebtedness with respect to debt-financed property.

Accepted Answer

Average acquisition indebtedness is the

Question 16

Francis is the CEO of Give, Inc., a § 501(c)(3) organization.Francis informs you that the will of a major donor transfers 100% of the stock of Friendly Hot Dogs to Give, Inc.Since Friendly is a profitable entity, Francis would like for Give to continue to own and operate Friendly Hot Dogs.You inform Francis that Friendly would be a feeder organization.Describe for the CEO what a feeder organization is and how it is taxed.

Accepted Answer

A feeder organization is a taxable entit

Question 17

Robin, Inc., a tax-exempt organization, leases a building and equipment to XYZ Corporation. The rental income from the building is $480,000 and from the equipment is $36,000. Rental expenses are $300,000 for the building and $33,000 for the equipment. What adjustment must be made to net unrelated business income?

Accepted Answer

A) $0. 
B) ($33,000). 
C) ($36,000). 
D) ($183,000). 
E) Some other amount. 
A) $0. 
B) ($33,000). 
C) ($36,000). 
D) ($183,000). 
E) Some other amount.

Question 18

Support the Pets, Inc., a § 501(c)(3) organization, provides pet food to humane societies.All of the pet food is received as contributions from individuals or from a wholly-owned, for-profit subsidiary (Sales, Inc.), which is in the retail pet food business (i.e., pet food that has been in inventory for over 120 days is transferred to Support the Pets for distributions to humane societies).In addition to the pet food, Sales distributes 75% of its net income each year to Support the Pets.

Accepted Answer

The answer of Support the Pets, Inc., a § 501(c)(3)...

Question 19

Which of the following statements regarding the disclosure Regulations is correct?

Accepted Answer

A) Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available requirement." 
B) Forms 990 and 1023 must be readily available to the general public. 
C) If an individual requests a copy of the required tax forms in writing, the exempt entity must provide a copy within 30 days. 
D) Only a.and b.are correct. 
E) a., b., and c.are all correct. 
A) Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available requirement." 
B) Forms 990 and 1023 must be readily available to the general public. 
C) If an individual requests a copy of the required tax forms in writing, the exempt entity must provide a copy within 30 days. 
D) Only a.and b.are correct. 
E) a., b., and c.are all correct.

Question 20

A corporate payment to an exempt organization that qualifies as a qualified sponsorship payment is not subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Exam 23: Exempt Entities

What tax forms are used to apply for exempt status?

Midnight Basketball, Inc., an exempt organization that organizes and conducts basketball games for youths ages 10-13, receives a $50,000 contribution from Brown Shoe Company.Midnight agrees to put Brown's logo on the cover of its monthly newsletter.

A private foundation is subject to which of the following taxes?

Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year. Is Assist, Inc., classified as a private foundation?

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

What is the purpose of the "broadly supported" exception for an exempt organization being classified as a private foundation?

Define a qualified corporate sponsorship payment.

Even though a church is not required to obtain IRS approval of its exempt status, it still must file Form 990 (Return of Organization Exempt from Income Tax) annually.

Agnes is aware that a feeder organization is subject to Federal income taxation.She wonders whether an organization otherwise taxable as a feeder organization can avoid such status if it remits less than 80% of its profits to the § 501(c)(3) entity.

What are intermediate sanctions and to what types of exempt organizations do they apply?

Match the following statements.

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

Define average acquisition indebtedness with respect to debt-financed property.

Which of the following statements regarding the disclosure Regulations is correct?

A corporate payment to an exempt organization that qualifies as a qualified sponsorship payment is not subject to the unrelated business income tax (UBIT).

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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