Question 1

First Americans, Inc., a § 501(c)(3) organization, operates a museum which depicts the lives of a tribe of Native Americans. It charges an admission fee, but also finances its operations through endowment income, contributions, and gift shop sales. The gift shop is operated by 50 volunteers and the museum is operated by 15 employees. Revenue by source is:

Accepted Answer

The answer of First Americans, Inc., a § 501(c)(3) organization,...

Question 2

The key factors in determining whether an exempt entity's income from a bingo game is unrelated trade or business income are whether substantially all the work is performed by volunteers and all of the prizes to be awarded are received as donations.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements regarding a private foundation is not correct?

Accepted Answer

A)   Only certain exempt organizations are classified as private foundations.
B)   A donor who makes a contribution to a private foundation has identical tax consequences as a donor who makes a contribution to a public charity.
C)   A private foundation may be subject to certain excise taxes because it is a private foundation.
D)   A church is not a private foundation.
E)   All of the statements are correct.F) A) and D)
G) A) and E)

Question 4

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed on exempt organizations classified as private foundations and also are imposed on exempt organizations classified as public charities.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following are qualified corporate sponsorship payments?

Accepted Answer

A)   The amount of the payment by the corporation to the exempt organization is contingent on the attendance at one or more events.
B)   The payment by the corporation to the exempt organization results in only a half-page advertisement in the event program.
C)   The payment by the corporation to the exempt organization results in the corporate logo appearing in the exempt organization's monthly newsletter.
D)   Only b. and c.
E)   a., b., and c.F) A) and B)
G) A) and C)

Question 6

Which of the following statements regarding exempt organization filing requirements is incorrect?

Accepted Answer

A)   Churches are required to file Form 990 (Return of Organization Exempt from Income Tax)  only if its annual gross receipts exceed $50,000.
B)   The due date for Form 990 (Return of Organization Exempt from Income Tax)  is the fifteenth day of the fifth month after the end of the taxable year whereas for private foundations the due date for Form 990-PF (Return of Private Foundation)  is the fifteenth day of the fourth month after the end of the tax year.
C)   All exempt organizations whose annual gross receipts do not exceed $50,000 can file Form 990-N (the "e-Postcard") .
D)   Only a. and b. are incorrect.
E)   a., b., and c. are incorrect.F) C) and D)
G) A) and B)

Question 7

Swan, Inc., a tax-exempt organization, leases a building and equipment to ABC Corporation. The rental income from the building is $240,000 and from the equipment is $18,000. Rental expenses are $150,000 for the building and $16,500 for the equipment. What adjustment must be made to net unrelated business income?

Accepted Answer

A)   $0.
B)   ($16,500) .
C)   ($18,000) .
D)   ($91,500) .
E)   Some other amount.F) D) and E)
G) B) and D)

Question 8

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?

Accepted Answer

To not be classified as a private founda...

Question 9

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 10

For purposes of the unrelated business income tax (UBIT) , land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Accepted Answer

A)   The principal purpose of acquiring the land is for use (substantially all)  in achieving the organization's exempt purpose.
B)   The fair market value of the land is not over 50% of the fair market value of land presently owned by the exempt organization.
C)   The use of the land by the exempt organization will begin within ten years of the acquisition date.
D)   At the date the land is acquired, it is located in the neighborhood of other property of the organization for which substantially all the use is for achieving the organization's exempt purpose.
E)   All of the above are requirements.F) A) and D)
G) A) and C)

Question 11

Which of the following taxes that are imposed on private foundations is, effectively, an audit fee to defray IRS expenses?

Accepted Answer

A)   Tax on self-dealing.
B)   Tax on failure to distribute income.
C)   Tax on excess business holdings.
D)   Only a. and c.
E)   None of the above.F) C) and D)
G) All of the above

Question 12

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 13

For purposes of the unrelated business income tax, debt-financed property is all property of the exempt organization that is held to produce income and on which there is acquisition indebtedness.

Accepted Answer

A) True 
 B)False

Question 14

If an exempt organization distributes "low-cost items" as an incidental part of its solicitation for charitable contributions, the distribution is not considered an unrelated trade or business.

Accepted Answer

The answer of If an exempt organization distributes "low-cost items"...

Question 15

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 16

Which of the following statements are correct with respect to the unrelated business income tax?

Accepted Answer

A)   Under certain circumstances, a corporate sponsorship payment can be classified as not being an unrelated trade or business.
B)   Under certain circumstances, a casino game can be classified as not being an unrelated trade or business.
C)   Under certain circumstances, the exchanging or renting of membership lists to other exempt organizations can be classified as not being an unrelated trade or business.
D)   Only a. and c. are correct.
E)   a., b., and c. all are correct.F) B) and E)
G) A) and C)

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

Miracle, Inc., is a § 501(c)(3) organization involved in medical research. Based on its expectation that proposed legislation will adversely affect the funding supporting its mission, Miracle hires a lobbyist to work in Washington to represent its views.

Accepted Answer

Miracle is eligible for and thus makes t...

Question 19

What are the common characteristics of organizations that receive exempt status?

Accepted Answer

Many organizations t...

Question 20

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

Accepted Answer

Trade or business, for purposes of the U...

Exam 15: Exempt Entities

The key factors in determining whether an exempt entity's income from a bingo game is unrelated trade or business income are whether substantially all the work is performed by volunteers and all of the prizes to be awarded are received as donations.

Correct Answer
verified

Which of the following statements are correct with respect to the unrelated business income tax?

Correct Answer
verified

Match the following statements.

Correct Answer
verified

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed on exempt organizations classified as private foundations and also are imposed on exempt organizations classified as public charities.

Correct Answer
verified

Which of the following are qualified corporate sponsorship payments?

Correct Answer
verified

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?

Correct Answer
verified
To not be classified as a private founda...
View Answer

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

Correct Answer
verified
Trade or business, for purposes of the U...
View Answer

If an exempt organization distributes "low-cost items" as an incidental part of its solicitation for charitable contributions, the distribution is not considered an unrelated trade or business.

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

For purposes of the unrelated business income tax (UBIT) , land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Correct Answer
verified

Correct Answer
verified

Which of the following taxes that are imposed on private foundations is, effectively, an audit fee to defray IRS expenses?

Correct Answer
verified

Which of the following statements regarding a private foundation is not correct?

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.

Correct Answer
verified

Miracle, Inc., is a § 501(c)(3) organization involved in medical research. Based on its expectation that proposed legislation will adversely affect the funding supporting its mission, Miracle hires a lobbyist to work in Washington to represent its views.

Correct Answer
verified
Miracle is eligible for and thus makes t...
View Answer

What are the common characteristics of organizations that receive exempt status?

Correct Answer
verified
Many organizations t...
View Answer

Correct Answer
verified

Match the following statements.

Correct Answer
verified

For purposes of the unrelated business income tax, debt-financed property is all property of the exempt organization that is held to produce income and on which there is acquisition indebtedness.

Correct Answer
verified

Which of the following statements regarding exempt organization filing requirements is incorrect?

Correct Answer
verified

Exam 15: Exempt Entities

The key factors in determining whether an exempt entity's income from a bingo game is unrelated trade or business income are whether substantially all the work is performed by volunteers and all of the prizes to be awarded are received as donations.

Correct AnswerverifiedShow Answer

Which of the following statements are correct with respect to the unrelated business income tax?

Correct AnswerverifiedShow Answer

Match the following statements.

Correct AnswerverifiedShow Answer

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed on exempt organizations classified as private foundations and also are imposed on exempt organizations classified as public charities.

Correct AnswerverifiedShow Answer

Which of the following are qualified corporate sponsorship payments?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedTo not be classified as a private founda...View AnswerShow Answer

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

Correct AnswerverifiedTrade or business, for purposes of the U...View AnswerShow Answer

If an exempt organization distributes "low-cost items" as an incidental part of its solicitation for charitable contributions, the distribution is not considered an unrelated trade or business.

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

For purposes of the unrelated business income tax (UBIT) , land that is acquired by the exempt organization for later exempt-use is excluded from the definition of debt-financed property if certain requirements are satisfied. Which of the following is not included in the requirements?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following taxes that are imposed on private foundations is, effectively, an audit fee to defray IRS expenses?

Correct AnswerverifiedShow Answer

Which of the following statements regarding a private foundation is not correct?

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.

Correct AnswerverifiedShow Answer

Miracle, Inc., is a § 501(c)(3) organization involved in medical research. Based on its expectation that proposed legislation will adversely affect the funding supporting its mission, Miracle hires a lobbyist to work in Washington to represent its views.

Correct AnswerverifiedMiracle is eligible for and thus makes t...View AnswerShow Answer

What are the common characteristics of organizations that receive exempt status?

Correct AnswerverifiedMany organizations t...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Match the following statements.

Correct AnswerverifiedShow Answer

For purposes of the unrelated business income tax, debt-financed property is all property of the exempt organization that is held to produce income and on which there is acquisition indebtedness.

Correct AnswerverifiedShow Answer

Which of the following statements regarding exempt organization filing requirements is incorrect?

Correct AnswerverifiedShow 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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To not be classified as a private founda...
View Answer

Correct Answer
verified
Trade or business, for purposes of the U...
View Answer

Correct Answer
verified

Correct Answer
verified
If the following requirements are satisf...
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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Correct Answer
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Miracle is eligible for and thus makes t...
View Answer

Correct Answer
verified
Many organizations t...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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