FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Exempt Entities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Essay

Review LaterAdd Note

Review Later

Arbor, Inc., an exempt organization, leases land, building, and machinery to a tenant for a 5-year period. The rent income for the land and building is $600,000 per year and that from the related machinery is $90,000 per year. Expenses incurred by Arbor for the land and building during the year are $65,000 and those for the machinery are $38,000. Net unrelated business income, which includes the above rental income and expenses, is $850,000. Calculate Arbor's unrelated business taxable income.

Correct Answer

verified

The net rent income from the land and b...

View Answer

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

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.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Which of the following types of § 501(c) (3) organizations are not private foundations?

A trade or business that is operated by an exempt organization which otherwise would be subject to the tax on unrelated business income is exempt from tax, if the profits generated by the trade or business are used by the exempt organization for exempt purposes.

Which of the following are organizations exempt under § 501(c) (3) ?

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

Engaging in a prohibited transaction can result in an exempt organization being subject to Federal income tax, but cannot cause it to lose its exempt status unless the exempt organization repeats the prohibited transaction.

Which of the following statements regarding intermediate sanctions is correct?

A § 501(c)(5) labor organization is prohibited from lobbying for or against the passage of legislation.

An exempt organization is located in the state of Nevada. Gambling in Nevada is legal. Therefore, bingo games are conducted by both taxable and tax-exempt organizations. If the net earnings from the bingo games are less than $25,000, the exempt organization is not subject to the unrelated business income tax (UBIT).

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

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

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).

Discuss benefits for which an exempt organization may be eligible, other than exemption from Federal income tax.

The excise tax imposed on a private foundation's excess business holdings is in effect an audit fee to defray IRS expenses.

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?

Under what circumstances are bingo games not treated as an unrelated trade or business?

An eligible § 501(c)(3) organization has made the § 501(h) election to participate in lobbying on a limited basis. If the ceiling on lobbying established in § 501(h) (lobbying nontaxable amount) is exceeded, what are the potential tax consequences to the exempt organization?

Which of the following statements is not correct?

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