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Exam 14: Exempt Entities

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Question 1

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Match the following tax forms. a.Return of Private Foundation. b.Application for Recognition of Exemption under § 501(c)(3). c.Return of Organization Exempt from Income Tax. d.Return of Certain Excise Taxes on Charities and Other Persons. e.Application for Recognition of Exemption under § 501(a). f.Application for Extension of Time. -Form 1024

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What tax forms are used to apply for exempt status?

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An organization that is exempt under § 5...

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Give an example of the indicated types of exempt organizations. a.League of Women Voters. b.Teachers' association. c.American Plywood Association. d.Six Flags over Texas theme park. e.Salvation Army. -§ 501(c)(4)civic league

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

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?

Match the following statements. a.Distribution of such items is not considered an unrelated trade or business if the value does not exceed $9.10 in 2008. b.Is considered an unrelated trade or business if the amount received is contingent upon the level of attendance at one or more events, broadcast ratings, or other factors indicating the degree of public exposure to one or more events. c.Is considered an unrelated trade or business if can be conducted by commercial (for-profit) entities. d.A trade or business that consists of either renting or exchanging these with another exempt organization is not an unrelated trade or business. -Low cost articles

The tax consequences to a donor of making a charitable contribution to an exempt organization classified as a private foundation are the same as the tax consequences to a donor of making a charitable contribution to an exempt organization that is not classified as a private foundation.

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

One reason for granting an exemption from Federal income tax to certain organizations is the belief that such organizations can perform certain government-like functions,and thereby reduce the financial burden that would otherwise fall on the Federal government.

Is the taxation of a feeder organization influenced by the percentage of its earnings that it remits to an exempt organization?

Which of the following statements is correct?

Which of the following attributes are associated with exempt organizations?

An exempt organization will not have any tax liability associated with the unrelated business income tax if the unrelated business income is $25,000 or less.

Pearl,Inc.,a tax-exempt organization,leases a building and machinery to White Partnership.The rental income from the 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?

Federal agencies exempt from Federal income tax under § 501(c)(1)are not subject to the unrelated business income tax (UBIT).

Links,Inc.,an exempt organization whose mission is to aid marriages threatened by golf,contributes $100,000 to Couples,Inc.,an exempt organization which provides counseling to dysfunctional marriages.Links,Inc.,has net UBTI (excluding any modifications associated with charitable contributions)of $800,000.Assuming that the $100,000 contribution has been deducted in calculating net UBTI,determine the amount of any further adjustment in calculating UBTI.

The key factor in determining whether an exempt entity's income from a bingo game is unrelated trade or business income is whether substantially all the work is performed by volunteers.

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

In calculating unrelated business taxable income,the exempt organization is permitted to deduct only the charitable contributions associated with the unrelated trade or business.

Rest,Inc.,a § 501(c)(3)exempt organization,hires a registered lobbyist to promote its position on pending legislation.For the year,its lobbying expenses are $100,000.Rest makes the § 501(h)election.Assume the lobbying nontaxable amount is $90,000. a.Will the lobbying expenses result in Rest losing its exempt status? b.Calculate the amount of any tax that Rest must pay associated with the lobbying expenses.