Question 1

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

Accepted Answer

Intermediate sanctions apply to public c

Question 2

Well, Inc., a private foundation, makes a speculative investment of $400,000 that puts the foundation assets at risk.
Calculate the tax on jeopardizing investments. Assume that corrective action is taken so that the additional tax does not apply.

Accepted Answer

The initial tax on the private

Question 3

Match the following statements.
a. Distribution of such items is not considered an unrelated trade or business if they are "low-cost items".
b. Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events
c. Is considered an unrelated trade or business if legally it can be conducted by commercial (for-profit) entities. 
d. A trade or business that consists of either renting or exchanging these with another exempt organization is not an unrelated trade or business.
-Branded calendars

Accepted Answer

The answer of Match the following statements.
a. Distribution of such...

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements are correct?

Accepted Answer

A)  If an exempt organization records annual gross receipts of less than $50,000, it files Form 990-N. 
B)  Private foundations must file Form 990-PF (Return of Private Foundation). 
C)  An exempt organization with less than $250,000 in gross receipts may file a Form 990-EZ. 
D)  Only a. and b. are correct. 
E)  a., b., and c. all are correct. 
A)  If an exempt organization records annual gross receipts of less than $50,000, it files Form 990-N. 
B)  Private foundations must file Form 990-PF (Return of Private Foundation). 
C)  An exempt organization with less than $250,000 in gross receipts may file a Form 990-EZ. 
D)  Only a. and b. are correct. 
E)  a., b., and c. all are correct.

Question 7

Gallery, a public charity, reports annual gross receipts of $100,000 and has total assets of $425,000. It should file a(n):

Accepted Answer

A)  Form 990. 
B)  Form 990-PF. 
C)  Form 990-N (e-Postcard). 
D)  Form 990-EZ. 
A)  Form 990. 
B)  Form 990-PF. 
C)  Form 990-N (e-Postcard). 
D)  Form 990-EZ.

Question 8

Which of the following statements regarding the unrelated business income tax is not correct?

Accepted Answer

A)  Unrelated business income is income from activities not related to the exempt purpose of the organization. 
B)  The unrelated business income tax is levied because the exempt organization is engaging in substantial ?????????? ??????????. 
C)  If the unrelated business income tax were not levied, nonexempt organizations would be placed at a substantial disadvantage when trying to compete with the exempt organization. 
D)  The tax rate that is applied to unrelated business taxable income is a flat 30% income tax rate. 
E)  All of the above statements are correct. 
A)  Unrelated business income is income from activities not related to the exempt purpose of the organization. 
B)  The unrelated business income tax is levied because the exempt organization is engaging in substantial ?????????? ??????????. 
C)  If the unrelated business income tax were not levied, nonexempt organizations would be placed at a substantial disadvantage when trying to compete with the exempt organization. 
D)  The tax rate that is applied to unrelated business taxable income is a flat 30% income tax rate. 
E)  All of the above statements are correct.

Question 9

Match the following statements.
a. Distribution of such items is not considered an unrelated trade or business if they are "low-cost items".
b. Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events
c. Is considered an unrelated trade or business if legally it can be conducted by commercial (for-profit) entities. 
d. A trade or business that consists of either renting or exchanging these with another exempt organization is not an unrelated trade or business.
-Corporate sponsorship payments

Accepted Answer

The answer of Match the following statements.
a. Distribution of such...

Question 10

Which of the following statements regarding low-cost articles is correct?

Accepted Answer

A)  The distribution of low-cost articles can be classified as not being an unrelated trade or business. 
B)  For 2018, a low-cost article is one that costs $10.80 or less. 
C)  Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income. 
D)  Only a. and b. are correct. 
E)  a., b., and c. are correct. 
A)  The distribution of low-cost articles can be classified as not being an unrelated trade or business. 
B)  For 2018, a low-cost article is one that costs $10.80 or less. 
C)  Any contributions received as the result of the distribution of low-cost articles must be included in unrelated business income. 
D)  Only a. and b. are correct. 
E)  a., b., and c. are correct.

Question 11

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 excess business holdings

Accepted Answer

The answer of Match the following statements.
a. May be subject...

Question 12

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-Form 990-PF.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 13

How can an exempt organization, otherwise classified as a private foundation, become a public charity?

Accepted Answer

An exempt organization that otherwise wo

Question 14

Which of the following excise taxes are imposed on private foundations?

Accepted Answer

A)  Tax on failure to distribute income. 
B)  Tax on excess business holdings. 
C)  Tax on excess charitable contributions. 
D)  Only a. and b. 
E)  a., b., and c. 
A)  Tax on failure to distribute income. 
B)  Tax on excess business holdings. 
C)  Tax on excess charitable contributions. 
D)  Only a. and b. 
E)  a., b., and c.

Question 15

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

Accepted Answer

A) True 
 B)False

Question 16

The League of Women Voters is a § 501(c)(3) organization.

Accepted Answer

A) True 
 B)False

Question 17

Some of the excise taxes which may be imposed on private foundations may be imposed on both the private foundation and the foundation manager.

Accepted Answer

A) True 
 B)False

Question 18

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax.
a. 10% initial tax and 25% additional tax on private foundation. 
b. 30% initial tax and 100% additional tax on private foundation. 
c. 10% initial tax and 200% additional tax on private foundation. 
d. 10% initial tax and 100% additional tax on disqualified person.
e. 10% initial tax and 200% additional tax on the disqualified person.
-Tax on failure to distribute adequate amounts of income

Accepted Answer

The answer of For each of the following taxes which...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-Debt-financed income is the net income from investment assets.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Exam 23: Exempt Entities

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

Well, Inc., a private foundation, makes a speculative investment of $400,000 that puts the foundation assets at risk. Calculate the tax on jeopardizing investments. Assume that corrective action is taken so that the additional tax does not apply.

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

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

Which of the following statements are correct?

Gallery, a public charity, reports annual gross receipts of $100,000 and has total assets of $425,000. It should file a(n):

Which of the following statements regarding the unrelated business income tax is not correct?

Which of the following statements regarding low-cost articles is correct?

How can an exempt organization, otherwise classified as a private foundation, become a public charity?

Which of the following excise taxes are imposed on private foundations?

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

The League of Women Voters is a § 501(c)(3) organization.

Some of the excise taxes which may be imposed on private foundations may be imposed on both the private foundation and the foundation manager.

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

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

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions

Taxing Business Income

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

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

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