Filters
Question type
Study Flashcards

Certain § 501(c)(3) exempt organizations are permitted to engage in lobbying activities on a limited basis. An example of such an exempt organization is a church.

A) True
B) False

Correct Answer

verifed

verified

Match the following statements. -Tax on excess business holdings


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 E)
G) C) and D)

Correct Answer

verifed

verified

Which of the following statements is correct regarding the unrelated business income tax (UBIT) ?


A) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is regularly carried on by the organization.
B) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business must be substantially related to the exempt purpose of the organization, and the trade or business must be regularly carried on by the organization.
C) To be subject to the UBIT, the exempt organization must conduct a trade or business, the trade or business is not substantially related to the exempt purpose of the organization, and the trade or business is carried on during more than half the year.
D) An exempt entity that conducts a business that competes with for-profit businesses automatically is subject to the UBIT.
E) None of the above statements is correct.

F) B) and C)
G) A) and E)

Correct Answer

verifed

verified

Hope, Inc., an exempt organization, owns a factory building that it leases to a taxable corporation for $100,000 per year. Related expenses for Hope are $30,000. Hope's average acquisition indebtedness on the building is $400,000 and the average adjusted basis is $600,000. Calculate Hope's unrelated debt­financed income and expenses. Then indicate the effect of these items on unrelated business taxable income.

Correct Answer

verifed

verified

The income from the factory building is ...

View Answer

An intermediate sanction imposed by the IRS on an exempt organization is a greater sanction than revocation of exempt status.

A) True
B) False

Correct Answer

verifed

verified

Which of the following statements are correct with respect to the unrelated business income tax?


A) Under certain circumstances, a corporate sponsorship payment can be classified as not being an unrelated trade or business.
B) Under certain circumstances, a casino game can be classified as not being an unrelated trade or business.
C) Under certain circumstances, the exchanging or renting of membership lists to other exempt organizations can be classified as not being an unrelated trade or business.
D) Only a. and c. are correct.
E) a., b., and c. all are correct.

F) D) and E)
G) B) and D)

Correct Answer

verifed

verified

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.

Correct Answer

verifed

verified

Amber's charitable contribution is compu...

View Answer

Match the following statements. -Debt-financed income is the net income from debt financed property.


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) D) and F)

Correct Answer

verifed

verified

Even though a church is not required to obtain IRS approval of its exempt status, it still annually must file a Form 990.

A) True
B) False

Correct Answer

verifed

verified

The income from a bingo game or a casino game conducted by an exempt organization may be unrelated business income.

A) True
B) False

Correct Answer

verifed

verified

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

Correct Answer

verifed

verified

The intent of the external support test ...

View Answer

The tax consequences to a donor of making a charitable contribution to an exempt organization classified as a private foundation may be less favorable than the tax consequences to a donor of making a charitable contribution to an exempt organization that is not classified as a private foundation.

A) True
B) False

Correct Answer

verifed

verified

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


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

F) D) and E)
G) C) and D)

Correct Answer

verifed

verified

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.

A) True
B) False

Correct Answer

verifed

verified

In what types of organizations does the UBIT apply?

Correct Answer

verifed

verified

The UBIT applies to all organi...

View Answer

A § 501(c) (3) organization that otherwise would be classified as a private foundation can avoid such classification if It satisfies:


A) Only an external support test.
B) Only an internal support test.
C) Both an external support test and an internal support test.
D) An external support test, an internal support test, and a good faith test.
E) None of the above.

F) A) and D)
G) A) and B)

Correct Answer

verifed

verified

Pearl Inc., a tax-exempt organization, leases land, building, and machinery to Purple Partnership for a 5-year period. The rental income from the land and building is $100,000, with related expenses of $40,000. The rental income from the machinery is $9,000, with related expenses of $3,000. What adjustment must be made to net unrelated business income?

Correct Answer

verifed

verified

The net rental income of $66,000 ($60,00...

View Answer

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


A) Exempt organization under § 501(c) (3) .
B) May not be subject to Federal income tax.
C) Permits limited lobbying activities.
D) Exempt organization under § 501(c) (7) .
E) Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.

F) A) and C)
G) C) and E)

Correct Answer

verifed

verified

Match the following statements with the correct description. -Kentwood Rodeo Club


A) Exempt organization under § 501(c) (3) .
B) May not be subject to Federal income tax.
C) Permits limited lobbying activities.
D) Exempt organization under § 501(c) (7) .
E) Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.

F) C) and E)
G) B) and E)

Correct Answer

verifed

verified

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

A) True
B) False

Correct Answer

verifed

verified

Showing 61 - 80 of 178

Related Exams

Exam 1

An Introduction to Taxation and Understanding the Federal Tax Law

195 Questions

Exam 2

Working With the Tax Law

86 Questions

Exam 3

Computing the Tax

185 Questions

Exam 4

Gross Income: Concepts and Inclusions

124 Questions

Exam 5

Gross Income: Exclusions

115 Questions

Exam 6

Deductions and Losses: in General

150 Questions

Exam 7

Deductions and Losses: Certain Business Expenses and Losses

90 Questions

Exam 8

Depreciation, Cost Recovery, Amortization, and Depletion

116 Questions

Exam 9

Deductions: Employee and Self-Employed-Related Expenses

198 Questions

Exam 10

Deductions and Losses: Certain Itemized Deductions

104 Questions

Exam 11

Investor Losses

108 Questions

Exam 12

Tax Credits and Payments

117 Questions

Exam 13

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

273 Questions

Exam 14

Property Transactions: Capital Gains and Losses, 1231, and Recapture Provisions

145 Questions

Exam 15

Alternative Minimum Tax

127 Questions

Exam 16

Accounting Periods and Methods

87 Questions

Exam 17

Corporations: Introduction and Operating Rules

106 Questions

Exam 18

Corporations: Organization and Capital Structure

90 Questions

Exam 19

Corporations: Distributions Not in Complete Liquidation

177 Questions

Exam 20

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

72 Questions

Exam 21

Partnerships

193 Questions

Exam 22

S Corporations

156 Questions

Exam 24

Multistate Corporate Taxation

169 Questions

Exam 25

Taxation of International Transactions

162 Questions

Exam 26

Tax Practice and Ethics

172 Questions

Exam 27

The Federal Gift and Estate Taxes

221 Questions

Exam 28

Income Taxation of Trusts and Estates

168 Questions

Show Answer