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Exam 23: Exempt Entities

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Question 31

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

A) True
B) False

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Question 32

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Which of the following statements regarding the disclosure Regulations is correct?

A) Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available requirement."
B) Forms 990 and 1023 must be readily available to the general public.
C) If an individual requests a copy of the required tax forms in writing,the exempt entity must provide a copy within 30 days.
D) Only a.and b.are correct.
E) a. ,b. ,and c.are all correct.

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

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Question 33

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Nice,Inc. ,a § 501(c)(3)organization,inherited 100% of the stock of Aggressive,Inc. ,a for-profit entity,at the beginning of the year.Although Nice plans on selling the stock of Aggressive,a buyer has not yet been located.Aggressive's taxable income for the year is $900,000.Aggressive distributed a dividend of $525,000 to Nice at the beginning of December.Determine the tax consequences for the taxable income and the dividend payment:

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

What are the excise taxes imposed on private foundations,and why are they imposed?

Assist,Inc. ,a § 501(c)(3)organization,receives the following sources of support during the tax year. Is Assist,Inc. ,classified as a private foundation?

Watch,Inc. ,a § 501(c)(3)exempt organization,solicits contributions through a mail campaign.An executive,who recently completed an executive MBA degree program,recommends that personal address labels be included as an additional way to motivate the potential donor to contribute.The value of these labels is $9.00 per potential donor.What is the effect of the inclusion of the address labels on Watch's unrelated business income?

Define "trade or business" for purposes of the unrelated business income tax (UBIT).

Which of the following are consequences of tax-exempt status?

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

If the unrelated business income of an exempt organization is $25,000 or less,the unrelated business income tax (UBIT)will be $0.

Third Church operates a gift shop in its parish house.The total income of the church is $800,000.Of this amount,$300,000 comes from offerings and $500,000 comes from the net income of the gift shop.The gift shop operations are conducted by five full-time employees.Which of the following statements is correct?

Revenue generated by an exempt organization from the distribution of low-cost items is not income from an unrelated trade or business.

Hotel,Inc. ,is a feeder organization for Museum,Inc. ,an exempt organization.Hotel,Inc. ,provides approximately 25% of the support needed by Museum,Inc. ,to carry out its tax-exempt mission.Which of the following statements is correct?

Which of the following statements regarding intermediate sanctions is correct?

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.

Define average acquisition indebtedness with respect to debt-financed property.

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

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

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?