Question 1

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) Private foundations.
D) None of these entities must file Form 990.

Accepted Answer

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

Question 2

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 3

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

- Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available requirement." (from the electronic filing and notice regulations)
- Forms 990 and 1023 must be readily available to the general public. (from the public inspection and disclosure regulations)
- If an individual requests a copy of the required tax forms in writing, the exempt entity must provide a copy within 30 days. (from the public inspection and disclosure regulations)

Question 4

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

All of the requirements listed in choices A, C, and D are included in the requirements for excluding land from the definition of debt-financed property. However, choice B is not included in the requirements. The fair market value of the land is not a factor in determining whether land qualifies for the exclusion.

Question 5

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 6

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 7

Match the following tax forms.

Accepted Answer

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

Question 8

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 9

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 ensures that the organization is set up as a tax-exempt entity and the operational test ensures that the organization operates in a way that is consistent with its tax-exempt purpose. It is not enough to just satisfy one of these tests. Additionally, a financial test is not required to maintain exempt status.

Question 10

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 answer of Which of the following is one of...

Question 11

Match the following statements with the correct description.

Accepted Answer

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

Question 12

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 $900,000. Aggressive distributed a dividend of $525,000 to Nice at the beginning of December. Determine the tax consequences for the taxable income and the dividend payment:

Accepted Answer

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

Question 13

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

The answer of Acquisition indebtedness consists of the unpaid amounts...

Question 14

Which of the following statements are correct?
A) If an exempt organization has annual gross receipts of less than $50,000, it does not file Form 990 (Return of Organization Exempt from Federal Income Tax).
B) Private foundations must file Form 990-PF (Return of Private Foundation).
C) If the gross income from an unrelated trade or business is less than $1,000, it is not necessary to file a return associated with the unrelated business income tax.
D) Only a. and c. are correct.
E) a., b., and c. are all correct.

Accepted Answer

Exempt organizations with gross receipts under $50,000 file Form 990-N instead of Form 990. Private foundations must file Form 990-PF. If unrelated business income is less than $1,000, no return is required.

Question 15

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) 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.

Accepted Answer

All of the statements are incorrect. Churches are actually excluded from filing Form 990, the due date for Form 990 is the fifteenth day of the fifth month for most exempt organizations but not all, and Form 990-N can only be filed by organizations with gross receipts not exceeding $50,000 (not all exempt organizations).

Question 16

Health, Inc., a § 501(c)(3) exempt organization, engages in an excess benefit transaction. The amount of the excess benefit is $300,000. 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 Health, Inc., a § 501(c)(3) exempt organization,...

Question 17

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 18

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 19

Give an example of the indicated types of exempt organizations.

Accepted Answer

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

Question 20

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...

Quiz 15: Exempt Entities

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

Match the following statements.

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

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?

Match the following statements.

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

Match the following tax forms.

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:

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 with the correct description.

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

Which of the following statements are correct?

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

Match the following statements.

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.

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.