Question 1

One of the requirements for an exempt organization being classified as an unrelated trade or business is that the trade or business is not substantially related to the exempt purpose of the organization.How can an exempt organization avoid satisfying this requirement?

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Question 2

A § 501(c)(3) organization exchanges its membership lists with another exempt organization.What are the Federal income tax consequences?

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Question 3

Under what circumstances are bingo games not treated as an unrelated trade or business?

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Question 4

Discuss any negative tax consequences that result from an exempt organization being classified as a private foundation.

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Question 5

If an exempt organization distributes "low-cost items" as an incidental part of its solicitation for charitable contributions,the distribution is not considered an unrelated trade or business.
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a.Under what dollar amount is a distribution no longer a "low-cost item"?
b.Provide examples of low-cost items.

Accepted Answer

The answer of If an exempt organization distributes "low-cost items"...

Question 6

Give an example of the indicated types of exempt organizations.
a.League of Women Voters.
b.Teachers' association.
c.American Plywood Association.
d.Six Flags over Texas theme park.
e.Salvation Army.
-§ 501(c)(3) organization

Accepted Answer

The Salvation Army is an example of a § 501(c)(3) organization, which includes charitable, religious, educational, scientific, and literary organizations. These organizations are exempt from federal income tax and are eligible to receive tax-deductible contributions.

Question 7

If an exempt organization is required to file an annual information return,on what form is it filed?

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Question 8

Plus,Inc.,is a § 501(c)(3) organization.It generates a small amount of net income each year.Ralph,the CEO of Plus,Inc.,is concerned that Plus may be subject to the unrelated business income tax.Is there a materiality exception to this tax? A 501(c)(3) with "net income" does not automatically result in a UBIT classification.They must be conducting a trade or business that is regularly carried on and that is not substantially related to its exempt purpose.

Accepted Answer

The answer of Plus,Inc.,is a § 501(c)(3) organization.It generates a...

Question 9

Give an example of the indicated types of exempt organizations.
a.League of Women Voters.
b.Teachers' association.
c.American Plywood Association.
d.Six Flags over Texas theme park.
e.Salvation Army.
-§ 501(c)(6) business league

Accepted Answer

The American Plywood Association is an example of a § 501(c)(6) business league, which is a type of organization that promotes the common business interests of its members.

Question 10

What tax forms are used to apply for exempt status?

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Question 11

Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?

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Question 12

Give an example of the indicated types of exempt organizations.
a.League of Women Voters.
b.Teachers' association.
c.American Plywood Association.
d.Six Flags over Texas theme park.
e.Salvation Army.
-Not an exempt organization

Accepted Answer

Six Flags over Texas theme park is a for-profit entity, unlike the other options which are examples of organizations typically exempt from taxes due to their educational, charitable, or similar purposes.

Question 13

Give an example of the indicated types of exempt organizations.
a.League of Women Voters.
b.Teachers' association.
c.American Plywood Association.
d.Six Flags over Texas theme park.
e.Salvation Army.
-§ 501(c)(4) civic league

Accepted Answer

The League of Women Voters qualifies as a § 501(c)(4) civic league because it is an organization that promotes social welfare and community involvement, which are key characteristics of civic leagues under this section of the IRS code.

Question 14

Define a qualified corporate sponsorship payment.

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Question 15

What is the purpose of the unrelated business income tax?

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Question 16

Give an example of the indicated types of exempt organizations.
a.League of Women Voters.
b.Teachers' association.
c.American Plywood Association.
d.Six Flags over Texas theme park.
e.Salvation Army.
-§ 501(c)(5) labor organization

Accepted Answer

A § 501(c)(5) organization is a labor, agricultural, or horticultural organization. A teachers' association fits this category as it is a type of labor organization representing the interests of teachers.

Question 17

Identify the components of the tax model for unrelated business taxable income.

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Question 18

What are the excise taxes imposed on private foundations,and why are they imposed?

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Question 19

To what types of organizations does the UBIT apply?

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Question 20

Which exempt organizations are not required to file an annual Federal tax return?

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Quiz 23: Exempt Entities