Question 1

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 the above statements are correct.
E)   None of the above statements is correct.F) D) and E)
G) B) and E)

Question 2

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

Accepted Answer

A) True 
 B)False

Question 3

Match the following tax forms
-Form 990

Accepted Answer

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 under Chapters 41 and 42 of the Internal Revenue Code.
E)  Application for Recognition of Exemption under § 501(a) .F) Application for Extension of Time.G) B) and C)
H) A) and F)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

What tax forms are used to apply for exempt status?

Accepted Answer

An organization that is exempt under § 5...

Question 6

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Accepted Answer

A) True 
 B)False

Question 7

If an exempt organization is required to file an annual information return, on what form is it filed?

Accepted Answer

Exempt organizations that are not privat...

Question 8

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Accepted Answer

A) True 
 B)False

Question 9

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 two of the five previous years.

Accepted Answer

A) True 
 B)False

Question 10

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

Accepted Answer

A) True 
 B)False

Question 11

Define a private foundation.

Accepted Answer

By default, all exempt entities are priv...

Question 12

Match the following statements
-Form 990-PF.

Accepted Answer

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 that is required to file a return and which is not a private foundation.
E)  Appropriate definition.F) Annual information return of a private foundation.G) B) and D)
H) C) and D)

Question 13

Garden, Inc., a qualifying § 501(c) (3)  organization, incurs lobbying expenditures of $210,000 during the taxable year. Exempt purpose expenditures are $900,000. If Garden makes the election under § 501(h)  to make lobbying expenditures on a limited basis, its tax liability resulting from the lobbying expenditures is:

Accepted Answer

A)   $0.
B)   $12,500.
C)   $50,000.
D)   $60,000.
E)   None of the above.F) All of the above
G) C) and D)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax
-Tax on failure to distribute

Accepted Answer

A)  5% initial tax and 25% additional tax on private foundation.
B)  15% initial tax and 100% additional tax on private foundation.
C)  100% additional tax on private foundation and 50% additional tax on foundation manager.
D)  5% initial tax and 200% additional tax on private foundation.
E)  5% initial tax and 200% additional tax on the disqualified person.F) C) and D)
G) A) and E)

Question 16

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

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) B) and E)

Question 17

Which of the following statements regarding the unrelated business income tax is not correct?

Accepted Answer

A)   Unrelated business income is income from activities not related to the exempt purpose of the exempt organization.
B)   The unrelated business income tax is levied because the exempt organization is engaging in substantial commercial activities.
C)   If the unrelated business income tax were not levied, nonexempt organizations would be placed at a substantial disadvantage when trying to compete with the exempt organization.
D)   The tax rate that is applied to unrelated business taxable income is the highest corporate tax rate.
E)   All of the above statements are correct.F) C) and E)
G) A) and B)

Question 18

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 19

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

Accepted Answer

A) True 
 B)False

Question 20

Give an example of the indicated types of exempt organizations
-§ 501(c) (4)  civic league

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

Exam 15: Exempt Entities

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 two of the five previous years.

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

Correct Answer
verified

Define a private foundation.

Correct Answer
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By default, all exempt entities are priv...
View Answer

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax -Tax on failure to distribute

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

Correct Answer
verified

What tax forms are used to apply for exempt status?

Correct Answer
verified
An organization that is exempt under § 5...
View Answer

Correct Answer
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Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

Correct Answer
verified

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

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
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Which of the following statements regarding the unrelated business income tax is not correct?

Correct Answer
verified

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Correct Answer
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Match the following statements -Form 990-PF.

Correct Answer
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If an exempt organization is required to file an annual information return, on what form is it filed?

Correct Answer
verified
Exempt organizations that are not privat...
View Answer

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

Correct Answer
verified

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

Correct Answer
verified

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Correct Answer
verified

Give an example of the indicated types of exempt organizations -§ 501(c) (4) civic league

Correct Answer
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Match the following tax forms -Form 990

Correct Answer
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Exam 15: Exempt Entities

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 two of the five previous years.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Define a private foundation.

Correct AnswerverifiedBy default, all exempt entities are priv...View AnswerShow Answer

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax -Tax on failure to distribute

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What tax forms are used to apply for exempt status?

Correct AnswerverifiedAn organization that is exempt under § 5...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

Correct AnswerverifiedShow Answer

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

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 of the following statements regarding the unrelated business income tax is not correct?

Correct AnswerverifiedShow Answer

To satisfy the "not for profit" requirement for exempt status, the entity may not be engaged in a trade or business.

Correct AnswerverifiedShow Answer

Match the following statements -Form 990-PF.

Correct AnswerverifiedShow Answer

If an exempt organization is required to file an annual information return, on what form is it filed?

Correct AnswerverifiedExempt organizations that are not privat...View AnswerShow Answer

The unrelated business income tax (UBIT) is calculated by multiplying unrelated business taxable income by the highest corporate tax rate.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.

Correct AnswerverifiedShow Answer

Give an example of the indicated types of exempt organizations -§ 501(c) (4) civic league

Correct AnswerverifiedShow Answer

Match the following tax forms -Form 990

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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By default, all exempt entities are priv...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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An organization that is exempt under § 5...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Exempt organizations that are not privat...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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