Which of the following statements is correct?
A) A feeder organization is a division of a tax-exempt organization and it is not subject to the Federal income tax.
B) A feeder organization is a tax-exempt organization whose purpose is to provide food to underprivileged children.
C) A feeder organization is a taxable organization whose purpose is to provide reduced cost meals to its employees that are excluded from the employee's gross income.
D) Only a. and b. are correct.
E) None of the above statements is correct.

Question

Quizplus · Accepted Answer

A feeder organization is typically a taxable entity that operates for profit and is not exempt from federal income tax, even if its profits are used to support a tax-exempt organization.

Which of the Following Statements Is Correct