Question 1

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business?
Is being classified as an unrelated trade or business good or bad?

Accepted Answer

If the following requirements are satisf...

Question 2

If personal property is leased with real property and more than 45% of the rent income under the lease is from personal property, all of the rent income is subject to the unrelated business income tax.

Accepted Answer

A) True 
 B)False

Question 3

Discuss any negative tax consequences that result from an exempt organization being classified as a private foundation.

Accepted Answer

Two potential negative tax consequences ...

Question 4

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

Accepted Answer

A) True 
 B)False

Question 5

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 jeopardizing investments

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) B) and C)

Question 6

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least three of the five previous years.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)   Private foundations are subject to the unrelated business income tax.
B)   Bingo games are not subject to the unrelated business income tax if they are conducted by an exempt organization.
C)   The exchange or rental of membership lists with other exempt and nonexempt organizations is not an unrelated trade or business.
D)   All of these statements are correct.
E)   None of these statements is correct.F) All of the above
G) D) and E)

Question 8

Give an example of the indicated types of exempt organizations.
-§ 501(c) (5)  labor organization

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) C) and D)
G) A) and B)

Question 9

Faith Church, a § 501(c)(3) organization, operates a bingo game two times each week to raise money to support the youth activities of the church. For the current year, net proceeds from the bingo game are $900,000.
a.
Determine the tax consequences for Faith Church if the bingo game is conducted in a jurisdiction where for-profit bingo games are illegal and where the bingo game is legal for exempt entities.
b.
Determine the tax consequences for Faith Church if the bingo game is conducted in a jurisdiction where bingo games are legal for both for-profit and exempt entities.

Accepted Answer

a. In this case, the $900,000 is exempt ...

Exam 23: Exempt Entities

Correct Answer
verified
a. In this case, the $900,000 is exempt ...
View 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 jeopardizing investments

Correct Answer
verified

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least three of the five previous years.

Correct Answer
verified

Discuss any negative tax consequences that result from an exempt organization being classified as a private foundation.

Correct Answer
verified
Two potential negative tax consequences ...
View Answer

If personal property is leased with real property and more than 45% of the rent income under the lease is from personal property, all of the rent income is subject to the unrelated business income tax.

Correct Answer
verified

Give an example of the indicated types of exempt organizations. -§ 501(c) (5) labor organization

Correct Answer
verified

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

Correct Answer
verified

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

Correct Answer
verified

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

Correct Answer
verified
If the following requirements are satisf...
View Answer

Exam 23: Exempt Entities

Correct Answerverifieda. In this case, the $900,000 is exempt ...View AnswerShow 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 jeopardizing investments

Correct AnswerverifiedShow Answer

For purposes of the unrelated business income tax (UBIT), a trade or business consists of any activity conducted for the production of income through the sale of merchandise, or from the performance of services for which profits have been earned during at least three of the five previous years.

Correct AnswerverifiedShow Answer

Discuss any negative tax consequences that result from an exempt organization being classified as a private foundation.

Correct AnswerverifiedTwo potential negative tax consequences ...View AnswerShow Answer

If personal property is leased with real property and more than 45% of the rent income under the lease is from personal property, all of the rent income is subject to the unrelated business income tax.

Correct AnswerverifiedShow Answer

Give an example of the indicated types of exempt organizations. -§ 501(c) (5) labor organization

Correct AnswerverifiedShow Answer

While the major objective of the Federal income tax law is to raise revenue, social considerations and economic objectives also affect the tax law.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

Correct AnswerverifiedIf the following requirements are satisf...View AnswerShow Answer

Correct Answer
verified
a. In this case, the $900,000 is exempt ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Two potential negative tax consequences ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If the following requirements are satisf...
View Answer