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Exam 15: Exempt Entities

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Question 61

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Match the following tax forms.

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Question 62

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Which of the following activities is not subject to the feeder organization rules?

A) One hundred percent of the net income of the for-profit entity is contributed to the exempt organization.
B) A trade or business where substantially all the work is performed by volunteers.
C) A trade or business of selling merchandise where substantially all of the merchandise has been received as contributions or gifts.
D) Only b. and c.
E) a., b., and c.

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

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Question 63

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Match the following statements with the correct description.

Unless the "widely available" provision is satisfied, a § 501(c)(3) exempt organization (excluding churches and private foundations) must make copies of the following available to the general public: Form 990 (Return of Organization Exempt from Income Tax) and Form 1023 [Application for Recognition of Exemption under § 501(c)(3)] or Form 1024 [Application for Recognition of Exemption under § 501(a)].

Identify the components of the tax model for unrelated business taxable income.

Personal property rental income is subject to and real property rental income is not subject to the unrelated business income tax.

Wonder, Inc., a § 501(c)(3) exempt organization, acquired all the stock of a for-profit corporation for $100,000. Wonder is a private foundation. The acquired corporation was not a related business. Calculate the tax on excess business holdings. Assume that corrective action is taken so that the additional tax does not apply.

Which of the following statements is correct?

Describe how an exempt organization can be eligible to lobby.

George is running for mayor of Culpepper. The members of Third Church adamantly oppose his candidacy. They would like to run a political advertisement in the local newspaper opposing his candidacy. The newspaper ad would have no effect on Third Church's exempt status because the ad opposes George; it does not support his opponent.

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

Which of the following requirements are among the three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax?

Which of the following is a requirement for exempt status?

Blue, Inc., receives its support from the following sources. Which of the following statements is correct?

Tan, Inc., a tax-exempt organization, has $65,000 of net unrelated business income. Total charitable contributions (all associated with the unrelated trade or business) are $7,500. Assuming that the $7,500 was deducted in calculating net unrelated business income, what is Tan's unrelated business taxable income?

Which of the following is not an excise tax that may be imposed on a private foundation?

Teal, Inc., is a private foundation which failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?

Relevant factors in the unrelated business income tax (UBIT) rules for determining whether a trade or business is regularly carried on by an exempt organization do not include which of the following?

Soft, Inc., a § 501(c)(3) organization, has been leasing a building to Polar, Inc., a taxable entity, for 15 years. The lease terminates in the current tax year. Soft's adjusted basis for the building is $400,000. It sells the building to the Development Partnership, a taxable entity, for $600,000. Selling expenses are $25,000.

Radio, Inc., an exempt organization, trains disabled individuals to be radio announcers. Rather than hold a traditional graduation exercise, the graduates compete in a radio announcer contest. Such activities are held four times each year. An admission fee of $10 is charged to the general public to attend the contest. Eight hundred people attended the contest this year, and prizes of $2,000 were given to the top 3 graduates. Calculate the amount of Radio's unrelated business income from this activity.