Which of the following activities, whose proceeds benefit an exempt organization, are subject to the feeder organization rules?
A)A weekly raffle operated by paid employees.
B)A car wash operated on Saturdays by volunteers.
C)A yard sale of donated clothes.
D)A thrift shop run by volunteers.
E)None of the above is subject to the feeder organization rules.

Question

Quizplus · Accepted Answer

The feeder organization rules apply to activities that are conducted by a taxable entity that benefits an exempt organization. In option A, the weekly raffle is operated by paid employees, indicating that it is likely run by a taxable entity. Therefore, it is subject to the feeder organization rules. Options B, C, and D all involve activities run by volunteers or where donated items are sold, indicating that they are likely not operated by a taxable entity and therefore not subject to the feeder organization rules. Therefore, the answer is A.

Which of the Following Activities, Whose Proceeds Benefit an Exempt