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 1

True/False

Review LaterAdd Note

Review Later

An entity satisfies the "not-for-profit" requirement for exempt status if its total expenses for the year exceed its gross income.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements regarding intermediate sanctions is correct?

A) Intermediate sanctions are self-assessing (i.e. ,calculated and paid by the taxpayer rather than being imposed by the IRS) .
B) The excise tax is imposed on the exempt organization and on disqualified persons.
C) Both a first-level tax and a second-level tax may apply.
D) The corporate tax rates apply in calculating the amount of the tax liability.
E) None of the above is correct.

F) None of the above
G) A) and B)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Rose,Inc. ,a qualifying § 501(c) (3) organization,incurs lobbying expenditures of $145,000 during the taxable year.Exempt purpose expenditures are $500,000.If Rose makes the election under § 501(h) to make lobbying expenditures on a limited basis,its tax liability resulting from the lobbying expenditures is:

Exempt organizations which are appropriately classified as private foundations include churches,educational institutions,and charitable organizations receiving a major portion of their support from the general public or the U.S. ,a state,or a political subdivision thereof.

Which of the following activities,whose proceeds benefit an exempt organization,are subject to the feeder organization rules?

To satisfy the broadly supported provision to avoid classification as a private foundation,the 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.

If an exempt organization is required to file an annual information return,on what form is it filed?

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

Which of the following statements are correct?

If the unrelated business income of an exempt organization is $20,000 or less,the unrelated business income tax (UBIT)will be $0.

Which of the following is a requirement for exempt status?

Amber,Inc. ,an exempt organization,reports unrelated business taxable income of $300,000.Total charitable contributions are $35,000,of which $31,000 (associated with the unrelated trade or business)has been deducted in calculating net unrelated business income.Calculate Amber's positive and negative adjustments in calculating unrelated business taxable income.

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

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

Medical,Inc. ,a § 501(c)(3)exempt organization,engages in an excess benefit transaction.The amount of the excess benefit is $200,000.For the organization management,the participation in the excess benefit transaction was not willful and was due to reasonable cause.Calculate the amount of the excise tax (first-level tax)imposed under the intermediate sanctions provision.

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.

The due date for both Form 990 (Return of Organization Exempt from Income Tax)and Form 990-PF (Return of Private Foundation)is the fifteenth day of the fourth month after the end of the taxable year.

Which of the following are exempt organizations to which contributions made are eligible for the charitable contribution deduction?

First Americans,Inc. ,a § 501(c)(3)organization,operates a museum which depicts the lives of a tribe of Native Americans.It charges an admission fee,but also finances its operations through endowment income,contributions,and gift shop sales.The gift shop is operated by 50 volunteers and the museum is operated by 15 employees.Revenue by source is:

A feeder organization is exempt from Federal income taxation because it carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt entity.