To satisfy the broadly supported provision to avoid classification as a private foundation, the exempt organization must satisfy both an external support test and an internal support test. Under the internal support test, more than one- third of the exempt organization's support for the taxable year must come from gross investment income and unrelated business taxable income.

Question

Quizplus · Accepted Answer

The statement misrepresents the internal support test. The correct statement is that under the internal support test, more than one-third of the exempt organization's support for the taxable year must come from public support (i.e., gifts, grants, contributions, membership fees, etc.), rather than gross investment income and unrelated business taxable income.

To Satisfy the Broadly Supported Provision to Avoid Classification as a Private