Question 1

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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

Accepted Answer

The following income and activities are

Question 4

Unless the "widely available" provision is satisfied, a § 501(c)(3) exempt organization (excluding churches and private foundations) must make copies of the following available to the general public: Form 990 (Return of Organization Exempt from Income Tax) and Form 1023 [Application for Recognition of Exemption under § 501(c)(3)] or Form 1024 [Application for Recognition of Exemption under § 501(a)].

Accepted Answer

A) True 
 B)False

Question 5

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, contribution

Question 6

Medical, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction. 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 due to reasonable cause. Calculate the amount of the excise tax (first-level tax) imposed under the intermediate sanctions provision.

Accepted Answer

Under the intermediate sanctions provisi

Question 7

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

Accepted Answer

A) True 
 B)False

Question 8

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax.

-Tax on failure to distribute

Accepted Answer

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. 
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.

Question 9

Pearl Inc., a tax-exempt organization, leases land, building, and machinery to Purple Partnership for a 5-year period. The rental income from the land and building is $100,000, with related expenses of $40,000. The rental income from the machinery is $9,000, with related expenses of $3,000. What adjustment must be made to net unrelated business income?

Accepted Answer

The net rental income of $66,000 ($60,00

Question 10

To be classified as a private foundation, the exempt status of an organization can be provided under either § 501(c)(1) or § 501(c)(3).

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

No. Such organizations may be only parti

Question 12

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.
-Private foundation

Accepted Answer

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

Question 13

A profit-related activity of an exempt organization avoids the unrelated business income tax if greater than 80% of the merchandise sold had been received as a contribution.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Why are some organizations exempt from Federal income tax?

Accepted Answer

The Code's treatment of exempt organizat

Question 16

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

Accepted Answer

A) True 
 B)False

Question 17

Midnight Basketball, Inc., an exempt organization that organizes and conducts basketball games for youths ages 10-13, receives a $20,000 contribution from Brown Shoe Company. Midnight agrees to put Brown's logo on the cover of its monthly newsletter.
a. Is the contribution unrelated business income to Midnight?
b. Assume that instead of putting Brown's logo on the cover of its newsletter, Midnight agrees to include a statement in the newsletter that youth playing in the games conducted by Midnight wear only shoes manufactured by Brown. Is the contribution unrelated business income to Midnight?
b. change if the amount of the payment was $7,500 instead of $20,000?
c. Would your answer in

Accepted Answer

a. No. The $20,000 payment is a qualifie

Question 18

Blue, Inc., receives its support from the following sources.

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 19

Match the following tax forms.

-Form 1023

Accepted Answer

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. 
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.

Question 20

If an exempt organization is required to file an annual information return, on what form is it filed?

Accepted Answer

Exempt organizations that are not privat

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

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

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

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

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax. -Tax on failure to distribute

To be classified as a private foundation, the exempt status of an organization can be provided under either § 501(c)(1) or § 501(c)(3).

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

A profit-related activity of an exempt organization avoids the unrelated business income tax if greater than 80% of the merchandise sold had been received as a contribution.

Why are some organizations exempt from Federal income tax?

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

Blue, Inc., receives its support from the following sources.

Match the following tax forms. -Form 1023

If an exempt organization is required to file an annual information return, on what form is it filed?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

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

A corporate sponsorship payment that is contingent on attendance at a sporting event increases the amount of unrelated business income.

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

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

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

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least two of the five previous years.

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax. -Tax on failure to distribute

To be classified as a private foundation, the exempt status of an organization can be provided under either § 501(c)(1) or § 501(c)(3).

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

A profit-related activity of an exempt organization avoids the unrelated business income tax if greater than 80% of the merchandise sold had been received as a contribution.

Why are some organizations exempt from Federal income tax?

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

Blue, Inc., receives its support from the following sources.

Match the following tax forms. -Form 1023

If an exempt organization is required to file an annual information return, on what form is it filed?

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

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