Question 1

Which of the following statements are correct?
A)If an exempt organization has annual gross receipts of less than $50,000, it files an e-Postcard (Form 990-N).
B)Private foundations must file Form 990-PF (Return of Private Foundation).
C)An exempt organization with less than $250,000 in gross receipts may file a Form 990-EZ.
D)Only a.and b.are correct.
E)a., b., and c.all are correct.

Accepted Answer

All three statements are correct. 
- Exempt organizations with annual gross receipts of less than $50,000 must file Form 990-N (e-Postcard). 
- Private foundations must file Form 990-PF (Return of Private Foundation). 
- Exempt organizations with gross receipts of less than $250,000 may file Form 990-EZ.

Question 2

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 3

Which of the following are consequences of tax-exempt status?
A)Not necessary to file a Federal income tax return.
B)Generally exempt from Federal income tax.
C)Contributions to the exempt organization are deductible by the donor.
D)Only b.and c.
E)a., b., and c.

Accepted Answer

The answer of Which of the following are consequences of...

Question 4

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 $600,000.Aggressive distributed a dividend of $450,000 to Nice at the beginning of December.Determine the tax consequences for the taxable income and the dividend payment to Aggressive, Inc.

Accepted Answer

The answer of Nice, Inc., a § 501(c)(3) organization, inherited...

Question 5

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax)?
A)Federal agencies.
B)Churches.
C)Exempt organizations whose annual gross receipts do not exceed $50,000.
D)Private foundations.
E)None of these entities must file Form 990.

Accepted Answer

The answer of Which of the following exempt organizations are...

Question 6

Which of the following is one of the requirements that will enable mortgaged land acquired by an exempt organization for later exempt use to be excluded from debt-financed property, for purposes of the unrelated business income tax?
A)The principal purpose of acquiring the land is for investment.
B)The land is used within ten years of the acquisition date in the organization's exempt purpose.
C)The land is located in the United States.
D)Only a.and b.
E)None of the above.

Accepted Answer

The land must be used within ten years of the acquisition date in the organization's exempt purpose to be excluded from debt-financed property for unrelated business income tax purposes.

Question 7

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 8

Match the following tax forms.

Accepted Answer

The answer of Match the following tax forms.
 ...

Question 9

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.

Accepted Answer

All three statements are correct regarding the disclosure regulations.

A) Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available requirement." This is specified under section 6104(d)(3)(B)(iii) of the Internal Revenue Code.

B) Forms 990 and 1023 must be readily available to the general public, as per section 6104(d)(1)(A) of the Internal Revenue Code.

C) If an individual requests a copy of the required tax forms in writing, the exempt entity must provide a copy within 30 days. This is stated under section 6104(d)(2)(A) of the Internal Revenue Code.

Question 10

Help, Inc., a tax-exempt organization, incurs lobbying expenses of $275,000 during the tax year.Help is eligible for and makes the § 501(h) lobbying expenditure election.During the year, Help spends $1,200,000 carrying out its exempt mission.

Accepted Answer

The answer of Help, Inc., a tax-exempt organization, incurs lobbying...

Question 11

Give an example of the indicated types of exempt organizations.

Accepted Answer

The answer of Give an example of the indicated types...

Question 12

Match the following statements with the correct description.

Accepted Answer

The answer of Match the following statements with the correct...

Question 13

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

The answer of Miracle, Inc., is a § 501(c)(3) organization...

Question 14

Which of the following statements regarding exempt organization filing requirements is incorrect?
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)Exempt organizations whose annual gross receipts do not exceed $50,000 can file an e-Postcard.
D)Only a.and b.are incorrect.
E)a., b., and c.are incorrect.

Accepted Answer

All of the statements are incorrect. Churches are generally exempt from filing Form 990, regardless of their gross receipts. The due date for Form 990 is the fifteenth day of the fifth month after the end of the organization's accounting period, whereas for private foundations it is the fifteenth day of the fifth month after the end of the organization's accounting period. Exempt organizations with annual gross receipts of $50,000 or less are generally not required to file Form 990, but instead can file an e-Postcard (Form 990-N).

Question 15

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?
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.

Accepted Answer

The requirements for excluding land from the definition of debt-financed property are:
1. The principal purpose of acquiring the land is for use (substantially all) in achieving the organization's exempt purpose.
2. 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.
3. The use of the land by the exempt organization will begin within ten years of the acquisition date.

Option B, which states that the fair market value of the land is not over 50% of the fair market value of land presently owned by the exempt organization, is not included in the requirements.

Question 16

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax.

Accepted Answer

The answer of For each of the following taxes which...

Question 17

To maintain exempt status, an organization must do which of the following:
A)Satisfy only an organizational test.
B)Satisfy only an operational test.
C)Satisfy both an organizational test and an operational test.
D)Satisfy a financial test.
E)Once exempt status is granted, it will continue regardless of whether the organizational test and the operational test are satisfied.

Accepted Answer

To maintain exempt status, an organization must satisfy both an organizational test and an operational test. The organizational test looks at the organization's structure and whether it meets the requirements for tax-exempt status, while the operational test examines the organization's activities to make sure they align with its tax-exempt purposes. A financial test may also be required for certain types of organizations, but it is not the only requirement for maintaining exempt status. Once exempt status is granted, it is not guaranteed to continue indefinitely, and organizations must continue to meet these tests or risk losing their exempt status.

Question 18

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 19

Medical, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction.The amount of the excess benefit is $200,000.For the organization management, the participation in the excess benefit transaction was not willful and was due to reasonable cause.Calculate the amount of the excise tax (first-level tax) imposed under the intermediate sanctions provision.

Accepted Answer

The answer of Medical, Inc., a § 501(c)(3) exempt organization,...

Question 20

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?
A)Debt incurred in acquiring or improving the property.
B)Debt incurred to enable the organization to carry out its exempt purpose.
C)Debt incurred to enable the exempt organization to acquire a feeder organization.
D)Only a.and b.
E)a., b., and c.

Accepted Answer

Acquisition indebtedness refers specifically to debt incurred in acquiring or improving the property, not for other purposes like carrying out an exempt purpose or acquiring a feeder organization.

Quiz 23: Exempt Entities

Which of the following statements are correct?

Match the following statements.

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

Which of the following exempt organizations are required to file Form 990 (Return of Organization Exempt from Income Tax) ?

Which of the following is one of the requirements that will enable mortgaged land acquired by an exempt organization for later exempt use to be excluded from debt-financed property, for purposes of the unrelated business income tax?

Match the following statements.

Match the following tax forms.

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

Help, Inc., a tax-exempt organization, incurs lobbying expenses of $275,000 during the tax year.Help is eligible for and makes the § 501(h) lobbying expenditure election.During the year, Help spends $1,200,000 carrying out its exempt mission.

Give an example of the indicated types of exempt organizations.

Match the following statements with the correct description.

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.

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

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?

For each of the following taxes which are imposed on private foundations, match the appropriate initial tax or additional tax.

To maintain exempt status, an organization must do which of the following:

Match the following statements.

Acquisition indebtedness consists of the unpaid amounts of which of the following for debt-financed property?