Question 1

Which of the following is not an excise tax that may be imposed on a private foundation?

Accepted Answer

A) Tax on jeopardizing investments. 
B) Tax on self-dealing. 
C) Tax on excessive foundation manager compensation. 
D) Tax on excess business holdings. 
E) All of these taxes may be imposed on a private foundation. 
A) Tax on jeopardizing investments. 
B) Tax on self-dealing. 
C) Tax on excessive foundation manager compensation. 
D) Tax on excess business holdings. 
E) All of these taxes may be imposed on a private foundation.

Question 2

Which of the following is one of the requirements that will enable mortgaged land acquired by an exempt organization for later exempt use to be excluded from debt-financed property,for purposes of the unrelated business income tax?

Accepted Answer

A) The principal purpose of acquiring the land is for investment. 
B) The land is sold within ten years of the acquisition date in the organization's exempt purpose. 
C) The land is located in the United States. 
D) Only a.and b. 
E) None of the above. 
A) The principal purpose of acquiring the land is for investment. 
B) The land is sold within ten years of the acquisition date in the organization's exempt purpose. 
C) The land is located in the United States. 
D) Only a.and b. 
E) None of the above.

Question 3

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed only on exempt organizations classified as private foundations.

Accepted Answer

A) True 
 B)False

Question 4

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 5

While engaging in a prohibited transaction can result in an exempt organization being subject to tax,it will not result in an exempt organization losing its exempt status.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following requirements are among the three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax?

Accepted Answer

A) The exempt organization conducts a trade or business. 
B) The trade or business is substantially related to the exempt purpose of the organization. 
C) The trade or business normally generates an annual profit of at least $25,000. 
D) Only a.and c. 
E) a. ,b. ,and c. 
A) The exempt organization conducts a trade or business. 
B) The trade or business is substantially related to the exempt purpose of the organization. 
C) The trade or business normally generates an annual profit of at least $25,000. 
D) Only a.and c. 
E) a. ,b. ,and c.

Question 7

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

Accepted Answer

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

Question 8

Join,Inc. ,a § 501(c)(3)exempt organization,engages in an excess benefit transaction.The amount of the excess benefit is $200,000.Calculate the amount of the excise tax (first-level tax)imposed under the intermediate sanctions provision.

Accepted Answer

Under the intermediate sanctio

Question 9

Which of the following statements is correct?

Accepted Answer

A) The unrelated business income tax (UBIT)does not apply to exempt organizations that receive broad public support. 
B) The unrelated business income tax (UBIT)treats the tax-exempt entity as if it were subject to the corporate income tax on its unrelated business income. 
C) Unrelated business income is income derived from activities not related to the exempt purpose of the exempt organization. 
D) Only b.and c.are correct. 
E) a. ,b. ,and c.are correct 
A) The unrelated business income tax (UBIT)does not apply to exempt organizations that receive broad public support. 
B) The unrelated business income tax (UBIT)treats the tax-exempt entity as if it were subject to the corporate income tax on its unrelated business income. 
C) Unrelated business income is income derived from activities not related to the exempt purpose of the exempt organization. 
D) Only b.and c.are correct. 
E) a. ,b. ,and c.are correct

Question 10

An exempt organization that otherwise would be classified as an unrelated trade or businesses will not be subject to the unrelated business income tax if the individuals performing substantially all the work of the trade or business do so without compensation.

Accepted Answer

A) True 
 B)False

Question 11

Define a qualified corporate sponsorship payment.

Accepted Answer

A payment qualifies

Question 12

The unrelated business income tax (UBIT)is designed to treat the entity as if it were subject to the corporate income tax,with the highest corporate tax rate (35%)applying.

Accepted Answer

A) True 
 B)False

Question 13

Private foundations are permitted to engage in lobbying activities.

Accepted Answer

A) True 
 B)False

Question 14

Qualified state tuition programs are exempt from Federal income tax under § 501(c)(3).

Accepted Answer

A) True 
 B)False

Question 15

Links,Inc. ,an exempt organization whose mission is to aid marriages threatened by golf,contributes $100,000 to Couples,Inc. ,an exempt organization which provides counseling to dysfunctional marriages.Links,Inc. ,has net UBTI (excluding any modifications associated with charitable contributions)of $800,000.Assuming that the $100,000 contribution has been deducted in calculating net UBTI,determine the amount of any further adjustment in calculating UBTI.

Accepted Answer

To the extent that charitable contributi

Question 16

Wonder,Inc. ,a § 501(c)(3)exempt organization,acquired all the stock of a for-profit corporation for $100,000.Wonder is a private foundation.The acquired corporation was not a related business.Calculate the tax on excess business holdings.Assume that corrective action is taken so that the additional tax does not apply.

Accepted Answer

The initial tax on the private

Question 17

A § 501(c)(3)organization exchanges its membership lists with another exempt organization.What are the Federal income tax consequences?

Accepted Answer

If an exempt organization conducts a tra

Question 18

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

Accepted Answer

Intermediate sanctions apply to so-calle

Question 19

If an exempt organization owns a feeder organization,the exempt organization is not taxed on the profits of the feeder organization under the unrelated business income tax (UBIT)rules.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?

Accepted Answer

A) Federal agencies. 
B) Churches. 
C) Exempt organizations whose annual gross receipts do not exceed $25,000. 
D) Private foundations. 
E) None of these entities must file Form 990. 
A) Federal agencies. 
B) Churches. 
C) Exempt organizations whose annual gross receipts do not exceed $25,000. 
D) Private foundations. 
E) None of these entities must file Form 990.

Exam 23: Exempt Entities

Which of the following is not an excise tax that may be imposed on a private foundation?

Which of the following is one of the requirements that will enable mortgaged land acquired by an exempt organization for later exempt use to be excluded from debt-financed property,for purposes of the unrelated business income tax?

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed only on exempt organizations classified as private foundations.

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

While engaging in a prohibited transaction can result in an exempt organization being subject to tax,it will not result in an exempt organization losing its exempt status.

Which of the following requirements are among the three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax?

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

Join,Inc. ,a § 501(c)(3)exempt organization,engages in an excess benefit transaction.The amount of the excess benefit is $200,000.Calculate the amount of the excise tax (first-level tax)imposed under the intermediate sanctions provision.

Which of the following statements is correct?

An exempt organization that otherwise would be classified as an unrelated trade or businesses will not be subject to the unrelated business income tax if the individuals performing substantially all the work of the trade or business do so without compensation.

Define a qualified corporate sponsorship payment.

The unrelated business income tax (UBIT)is designed to treat the entity as if it were subject to the corporate income tax,with the highest corporate tax rate (35%)applying.

Private foundations are permitted to engage in lobbying activities.

Qualified state tuition programs are exempt from Federal income tax under § 501(c)(3).

A § 501(c)(3)organization exchanges its membership lists with another exempt organization.What are the Federal income tax consequences?

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

If an exempt organization owns a feeder organization,the exempt organization is not taxed on the profits of the feeder organization under the unrelated business income tax (UBIT)rules.

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?

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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