Exam 23: Exempt Entities

Match the following statements. a. May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received. b. Tax imposed for engaging in transactions with disqualified persons. c. Tax imposed for making investments that are too risky. d. Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses. -Tax on self-dealing

An eligible § 501(c)(3) organization has made the § 501(h) election to participate in lobbying on a limited basis. If the lobbying nontaxable amount is exceeded, what are the potential tax consequences to the exempt organization?

Which of the following attributes are associated with exempt organizations?

A church is one of the types of exempt organizations.

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.

Describe how an exempt organization can be eligible to make lobbying expenditures without losing its tax exemption.

Faith Church, a § 501(c)(3) organization, operates a bingo game two times each week to raise money to support the youth activities of the church. For the current year, net proceeds from the bingo game are $900,000. a.Determine the tax consequences for Faith Church if the bingo game is conducted in a jurisdiction where for-profit bingo games are illegal, and where the bingo game is legal for exempt entities. b.Determine the tax consequences for Faith Church if the bingo game is conducted in a jurisdiction where bingo games are legal for both for-profit and exempt entities.

Which of the following statements are correct with respect to the unrelated business income tax?

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

Hospital wants to avoid the UBIT on its gift shop sales. To the extent possible, Hospital should:

Which of the following statements is correct regarding the disclosure Regulations for exempt entities?

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

The excise tax imposed on a private foundation's investment income can be imposed as an initial (first-level) tax but cannot be imposed as an additional (second-level) tax.

The Form 990-N:

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

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

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes.

For purposes of the unrelated business income tax (UBIT), land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not a requirement?

Miracle, Inc., is a § 501(c)(3) organization involved in medical research. Based on its expectation that proposed legislation will adversely affect the funding supporting its mission, Miracle hires a lobbyist to work in Washington to represent its views. Miracle is eligible for and thus makes the § 501(h) election. It calculates the lobbying nontaxable amount to be $100,000 ($500,000 exempt purpose expenditures × 20%). The total lobbying expenditures for the year were $115,000. Calculate Miracle's tax on excess lobbying expenditures.

Teal, Inc., is a private foundation which failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?