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Exam 23: Exempt Entities

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Question 31

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Match the following statements.

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Question 32

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What are the excise taxes imposed on private foundations, and why are they imposed?

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The excise taxes imposed on private foun...

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Question 33

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Midnight Basketball, Inc., an exempt organization that organizes and conducts basketball games for youths ages 10-13, receives a $50,000 contribution from Brown Shoe Company.Midnight agrees to put Brown's logo on the cover of its monthly newsletter.

Define average acquisition indebtedness with respect to debt-financed property.

Robin, Inc., a tax-exempt organization, leases a building and equipment to XYZ Corporation. The rental income from the building is $480,000 and from the equipment is $36,000. Rental expenses are $300,000 for the building and $33,000 for the equipment. What adjustment must be made to net unrelated business income?

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

Sandy is the treasurer for Choose, Inc., a § 501(c)(3) organization.The CEO has indicated that he would like for the exempt organization to make a substantial contribution to an entity which is lobbying against a legislative position that would be detrimental to Choose, Inc.Describe for the CEO under what circumstances an exempt organization can be eligible to lobby.

Which of the following statements regarding the disclosure Regulations is correct?

Define a qualified corporate sponsorship payment.

Support the Pets, Inc., a § 501(c)(3) organization, provides pet food to humane societies.All of the pet food is received as contributions from individuals or from a wholly-owned, for-profit subsidiary (Sales, Inc.), which is in the retail pet food business (i.e., pet food that has been in inventory for over 120 days is transferred to Support the Pets for distributions to humane societies).In addition to the pet food, Sales distributes 75% of its net income each year to Support the Pets.

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

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

Which of the following are available options for the IRS in dealing with an exempt organization entering into prohibited transactions?

A corporate payment to an exempt organization that qualifies as a qualified sponsorship payment is not subject to the unrelated business income tax (UBIT).

What tax forms are used to apply for exempt status?

Even though a church is not required to obtain IRS approval of its exempt status, it still must file Form 990 (Return of Organization Exempt from Income Tax) annually.

Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year. Is Assist, Inc., classified as a private foundation?

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.

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.

Woeful, Inc., a tax-exempt organization, leases a building and machinery to Purple Partnership.The rental income from the building is $180,000, with related expenses of $70,000.The rental income from the machinery is $12,000, with related expenses of $3,000.What adjustment must be made to net unrelated business income?