Question 1

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax) ?

Accepted Answer

A)   Federal agencies.
B)   Churches.
C)   Exempt organizations whose annual gross receipts do not exceed $50,000.
D)   Private foundations.
E)   None of these entities must file Form 990.F) A) and E)
G) B) and E)

Question 2

Match the following statements.
-Debt-financed income is the net income from investment assets.

Accepted Answer

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.G) B) and C)
H) All of the above

Question 3

A church is one of the types of exempt organizations.

Accepted Answer

A) True 
 B)False

Question 4

Give an example of the indicated types of exempt organizations.
-§ 501(c) (6)  business league

Accepted Answer

A)  League of Women Voters.
B)  Teachers’ association.
C)  American Plywood Association.
D)  Six Flags over Texas theme park.
E)  Salvation Army.F) A) and D)
G) A) and E)

Question 5

Match the following statements.
-Corporate sponsorship payments

Accepted Answer

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.E) C) and D)
F) B) and D)

Question 6

For an exempt organization to be subject to the unrelated business income tax, the trade or business must not be substantially related to the exempt purpose of the organization.

Accepted Answer

A) True 
 B)False

Question 7

To satisfy the broadly supported provision to avoid classification as a private foundation, an exempt organization must satisfy both an external support test and an internal support test. Under the internal support test, more than one- third of the exempt organization's support for the taxable year must come from gross investment income and unrelated business taxable income.

Accepted Answer

A) True 
 B)False

Question 8

The Jimenez Group, a private foundation, has been found guilty of self-dealing. To minimize its Federal excise taxes from this activity, Jimenez should:

Accepted Answer

A)   Surrender its tax-exempt status.
B)   Reorganize as a C corporation.
C)   Pay the second-level excise tax immediately.
D)   Undo ("correct")  the violation immediately.E) B) and C)
F) None of the above

Question 9

For each of the following taxes that are imposed on private foundations and/or foundation managers, match the appropriate initial tax or additional tax.
-Tax on self-dealing

Accepted Answer

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.F) A) and B)
G) A) and C)

Question 10

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 commercial activities.
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 these statements are correct.F) A) and E)
G) A) and C)

Question 11

Medical, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction such that the intermediate sanctions rules may apply. The amount of the excess benefit is $50,000. For the organization management, the participation in the excess benefit transaction was not willful and was supported by reasonable cause. Calculate the amount of the excise tax (first-level tax only) imposed under the intermediate sanctions provision.

Accepted Answer

Under the intermediate sanctions provisi...

Question 12

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.E) A) and B)
F) A) and D)

Question 13

Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

Accepted Answer

A)   $-0-.
B)   $13,000.
C)   $14,000.
D)   $20,000.E) None of the above
F) C) and D)

Question 14

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

Accepted Answer

The excise taxes imposed on private foun...

Question 15

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

Accepted Answer

Many organizations that qualify for exem...

Question 16

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Accepted Answer

A)   $0.
B)   $150,000.
C)   $600,000.
D)   $900,000.E) All of the above
F) None of the above

Question 17

Match the following statements.
-Tax on self-dealing

Accepted Answer

A)  May be subject to some Federal income taxation, and classification may adversely affect the 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.E) B) and D)
F) All of the above

Question 18

Define a qualified corporate sponsorship payment.

Accepted Answer

A payment qualifies as a qualified spons...

Question 19

Match the following statements.
-Form 990.

Accepted Answer

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.G) C) and E)
H) B) and E)

Question 20

Theater, Inc., an exempt organization, owns a printing company, Printers, Inc., that remits 85% of its profits to Theater. Since Printers remits at least 85% of its profits to Theater, neither Theater, nor Printers, must pay income tax on this $85,000 ($100,000 × 85%).

Accepted Answer

A) True 
 B)False

Exam 23: Exempt Entities

Match the following statements. -Debt-financed income is the net income from investment assets.

Correct Answer
verified

Define a qualified corporate sponsorship payment.

Correct Answer
verified
A payment qualifies as a qualified spons...
View Answer

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

Correct Answer
verified

The Jimenez Group, a private foundation, has been found guilty of self-dealing. To minimize its Federal excise taxes from this activity, Jimenez should:

Correct Answer
verified

Theater, Inc., an exempt organization, owns a printing company, Printers, Inc., that remits 85% of its profits to Theater. Since Printers remits at least 85% of its profits to Theater, neither Theater, nor Printers, must pay income tax on this $85,000 ($100,000 × 85%).

Correct Answer
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Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax) ?

Correct Answer
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Match the following statements. -Form 990.

Correct Answer
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Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

Correct Answer
verified

For an exempt organization to be subject to the unrelated business income tax, the trade or business must not be substantially related to the exempt purpose of the organization.

Correct Answer
verified

A church is one of the types of exempt organizations.

Correct Answer
verified

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

Correct Answer
verified
Many organizations that qualify for exem...
View Answer

Match the following statements. -Tax on self-dealing

Correct Answer
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For each of the following taxes that are imposed on private foundations and/or foundation managers, match the appropriate initial tax or additional tax. -Tax on self-dealing

Correct Answer
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Correct Answer
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Under the intermediate sanctions provisi...
View Answer

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

Correct Answer
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Give an example of the indicated types of exempt organizations. -§ 501(c) (6) business league

Correct Answer
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Match the following statements. -Corporate sponsorship payments

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

Correct Answer
verified
The excise taxes imposed on private foun...
View Answer

Correct Answer
verified

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Correct Answer
verified

Exam 23: Exempt Entities

Match the following statements. -Debt-financed income is the net income from investment assets.

Correct AnswerverifiedShow Answer

Define a qualified corporate sponsorship payment.

Correct AnswerverifiedA payment qualifies as a qualified spons...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The Jimenez Group, a private foundation, has been found guilty of self-dealing. To minimize its Federal excise taxes from this activity, Jimenez should:

Correct AnswerverifiedShow Answer

Theater, Inc., an exempt organization, owns a printing company, Printers, Inc., that remits 85% of its profits to Theater. Since Printers remits at least 85% of its profits to Theater, neither Theater, nor Printers, must pay income tax on this $85,000 ($100,000 × 85%).

Correct AnswerverifiedShow Answer

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax) ?

Correct AnswerverifiedShow Answer

Match the following statements. -Form 990.

Correct AnswerverifiedShow Answer

Chorus reports $20,000 of sales of pizzas at the local high school ballgames this year. Related expenses total $6,000. UBTI equals:

Correct AnswerverifiedShow Answer

For an exempt organization to be subject to the unrelated business income tax, the trade or business must not be substantially related to the exempt purpose of the organization.

Correct AnswerverifiedShow Answer

A church is one of the types of exempt organizations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedMany organizations that qualify for exem...View AnswerShow Answer

Match the following statements. -Tax on self-dealing

Correct AnswerverifiedShow Answer

For each of the following taxes that are imposed on private foundations and/or foundation managers, match the appropriate initial tax or additional tax. -Tax on self-dealing

Correct AnswerverifiedShow Answer

Correct AnswerverifiedUnder the intermediate sanctions provisi...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Give an example of the indicated types of exempt organizations. -§ 501(c) (6) business league

Correct AnswerverifiedShow Answer

Match the following statements. -Corporate sponsorship payments

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe excise taxes imposed on private foun...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Ballet's lobbying nontaxable amount is $600,000. Its lobbying expenditures ceiling is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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A payment qualifies as a qualified spons...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Many organizations that qualify for exem...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Under the intermediate sanctions provisi...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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The excise taxes imposed on private foun...
View Answer

Correct Answer
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Correct Answer
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