FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 23: Exempt Entities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Match the following statements. -Feeder organization

A) Carries on a trade or business for the benefit of an exempt organization, remits its profits to the exempt organization, and is not exempt from Federal income tax.
B) May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.
C) Tax imposed for engaging in transactions with disqualified persons.
D) Enables certain exempt organizations to engage in lobbying activities on a limited basis.
E) Tax imposed on investments that enable a private foundation to control unrelated businesses.

F) C) and D)
G) A) and D)

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Match the following statements. -Form 990.

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 which is not a private foundation.
E) Appropriate definition.
F) Annual information return of a private foundation.

G) B) and C)
H) A) and F)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Match the following statements with the correct description. -Exempt organization

Orange, Inc., a private foundation, engages in a transaction with a disqualified person in the amount of $800,000. Calculate the tax on self-dealing. Assume that corrective action is taken so that the additional tax does not apply.

General requirements for exempt status include the organization serving the common good and the organization being a not-for-profit entity.

Ice, Inc., a § 501(c)(3) organization, has been leasing a building to Soft, Inc., a taxable entity, for 15 years. The lease terminates in the current tax year. Ice's adjusted basis for the building is $225,000. It sells the building to the Development Partnership, a taxable entity, for $440,000. Selling expenses are $26,400. a. Calculate the effect of the sale on Ice's UBTI. b. Assume instead that Development Partnership is a tax-exempt entity. Calculate the effect of the sale on Ice's UBTI.

For an activity to be considered as regularly carried on for purposes of the unrelated business income tax, the activity must be conducted during the work week (i.e., activities performed on the weekend are not considered in determining if the activity is regularly carried on).

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

Francis is the CEO of Give, Inc., a § 501(c)(3) organization. Francis informs you that the will of a major donor transfers 100% of the stock of Friendly Hot Dogs to Give, Inc. Since Friendly is a profitable entity, Francis would like for Give to continue to own and operate Friendly Hot Dogs. You inform Francis that Friendly would be a feeder organization. Describe for the CEO what a feeder organization is and how it is taxed.

A private foundation is subject to which of the following taxes?

Only certain exempt organizations must obtain IRS approval to obtain exempt status.

Discuss the relationship between the qualification requirements for exempt status and the maintenance requirements.

Give an example of the indicated types of exempt organizations. -Not an exempt organization

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

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

Which of the following taxes that are imposed on private foundations is, effectively, an audit fee to defray IRS expenses?

Restful, Inc., a § 501(c)(3) exempt organization, hires a registered lobbyist to promote its position on pending legislation. For the year, its lobbying expenses are $100,000. Restful makes the § 501(h) election. Assume the lobbying nontaxable amount is $90,000. a. Will the lobbying expenses result in Restful losing its exempt status? b. Calculate the amount of any tax that Restful must pay associated with the lobbying expenses.

An exempt entity in no circumstance is subject to Federal income tax.

Match the following statements. -Form 990-PF.

Define a qualified corporate sponsorship payment.