Question 1

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 2

Which of the following types of § 501(c)(3)organizations are not private foundations?

Accepted Answer

A) Hospitals. 
B) Churches. 
C) Colleges and universities. 
D) Only a.and b. 
E) a. ,b. ,and c. 
A) Hospitals. 
B) Churches. 
C) Colleges and universities. 
D) Only a.and b. 
E) a. ,b. ,and c.

Question 3

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

Accepted Answer

A bingo game is not an unrelat

Question 4

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 5

Which of the following statements regarding intermediate sanctions is correct?

Accepted Answer

A) Intermediate sanctions are self-assessing (i.e. ,calculated and paid by the taxpayer rather than being imposed by the IRS). 
B) The tax is imposed on the exempt organization. 
C) Both a first-level tax and a second-level tax may apply. 
D) The corporate tax rates apply in calculating the amount of the tax liability. 
E) None of the above is correct. 
A) Intermediate sanctions are self-assessing (i.e. ,calculated and paid by the taxpayer rather than being imposed by the IRS). 
B) The tax is imposed on the exempt organization. 
C) Both a first-level tax and a second-level tax may apply. 
D) The corporate tax rates apply in calculating the amount of the tax liability. 
E) None of the above is correct.

Question 6

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

Accepted Answer

A) True 
 B)False

Question 7

The income from a bingo game conducted by an exempt organization may be unrelated business income.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

Average acquisition indebtedness is the

Question 9

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

Accepted Answer

The excise taxes imposed on private foun

Question 10

If the unrelated business income of an exempt organization is $25,000 or less,the unrelated business income tax (UBIT)will be $0.

Accepted Answer

A) True 
 B)False

Question 11

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:

Accepted Answer

The answer of Nice,Inc. ,a § 501(c)(3)organization,inherited 100% of the...

Question 12

Define "trade or business" for purposes of the unrelated business income tax (UBIT).

Accepted Answer

Trade or business,for purposes of the UB

Question 13

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

Discuss benefits for which an exempt organization may be eligible,other than exemption from Federal income tax.

Accepted Answer

In addition to being exempt fr

Question 17

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 18

Which of the following are consequences of tax-exempt status?

Accepted Answer

A) Not necessary to file a Federal income tax return. 
B) Generally exempt from Federal income tax. 
C) Contributions to the exempt organization may be deductible by the donor. 
D) Only b.and c. 
E) a. ,b. ,and c. 
A) Not necessary to file a Federal income tax return. 
B) Generally exempt from Federal income tax. 
C) Contributions to the exempt organization may be deductible by the donor. 
D) Only b.and c. 
E) a. ,b. ,and c.

Question 19

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 $9.00 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 20

Third Church operates a gift shop in its parish house.The total income of the church is $800,000.Of this amount,$300,000 comes from offerings and $500,000 comes from the net income of the gift shop.The gift shop operations are conducted by five full-time employees.Which of the following statements is correct?

Accepted Answer

A) The $800,000 is unrelated business income. 
B) The $500,000 of gift shop net income is unrelated business income. 
C) The $300,000 is unrelated business income because the gift shop is a feeder organization. 
D) None of the $800,000 is unrelated business income. 
E) The unrelated business income tax does not apply to churches. 
A) The $800,000 is unrelated business income. 
B) The $500,000 of gift shop net income is unrelated business income. 
C) The $300,000 is unrelated business income because the gift shop is a feeder organization. 
D) None of the $800,000 is unrelated business income. 
E) The unrelated business income tax does not apply to churches.

Exam 23: Exempt Entities

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

Which of the following types of § 501(c)(3)organizations are not private foundations?

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

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 statements regarding intermediate sanctions is correct?

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

The income from a bingo game conducted by an exempt organization may be unrelated business income.

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

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

If the unrelated business income of an exempt organization is $25,000 or less,the unrelated business income tax (UBIT)will be $0.

Define "trade or business" for purposes of the unrelated business income tax (UBIT).

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

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?

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.

Discuss benefits for which an exempt organization may be eligible,other than exemption from Federal income tax.

Which of the following are consequences of tax-exempt status?

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

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

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

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

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

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