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Exam 23: Exempt Entities

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Question 41

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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. -The trade or business is not substantially related to the exempt purpose of the organization.

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Question 42

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Match the following tax forms. a.Return of Private Foundation. b.Application for Recognition of Exemption under § 501(c)(3). c.Return of Organization Exempt from Income Tax. d.Application for Recognition of Exemption under § 501(a). -Form 990-PF

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Question 43

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

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

Garden,Inc.,a qualifying § 501(c) (3) organization,incurs lobbying expenditures of $210,000 during the taxable year.Exempt purpose expenditures are $900,000.If Garden makes the election under § 501(h) to make lobbying expenditures on a limited basis,its tax liability resulting from the lobbying expenditures is:

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

If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt organizations the organization's donor or membership list,such trade or business is an unrelated trade or business.

Agnes is aware that a feeder organization is subject to Federal income taxation.She wonders whether an organization otherwise taxable as a feeder organization can avoid such status if it remits less than 80% of its profits to the § 501(c)(3) entity.

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

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

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

Give an example of the indicated types of exempt organizations. a.League of Women Voters. b.Teachers' association. c.American Plywood Association. d.Six Flags over Texas theme park. e.Salvation Army. -§ 501(c)(6) business league

Even though a church is not required to obtain IRS approval of its exempt status,it still annually must file a Form 990.

Which of the following statements is correct?

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

Match the following tax forms. a.Return of Private Foundation. b.Application for Recognition of Exemption under § 501(c)(3). c.Return of Organization Exempt from Income Tax. d.Application for Recognition of Exemption under § 501(a). -Form 1024

Which of the following statements regarding the unrelated business income tax is correct?

What are the common characteristics of organizations that receive exempt status?

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 self-dealing

Match the following tax forms. a.Return of Private Foundation. b.Application for Recognition of Exemption under § 501(c)(3). c.Return of Organization Exempt from Income Tax. d.Application for Recognition of Exemption under § 501(a). -Form 990