Question 1

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-The trade or business consists of selling merchandise, and substantially all of the merchandise has been received as gifts or contributions.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 2

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-The trade or business is not substantially related to the exempt purpose of the organization.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 3

Match the following statements.
a. May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.
b. Tax imposed for engaging in transactions with disqualified persons. 
c. Tax imposed for making investments that are too risky.
d. Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses.
-Tax on self-dealing

Accepted Answer

The tax on self-dealing involves a 10% initial tax and a 200% additional tax on the disqualified person involved in the self-dealing transaction with the private foundation.

Question 4

School has been paying the UBIT every year. To reduce or eliminate this year's tax liability, School might:
A) Relate the profit-making activities to its educational purpose.
B) Conduct the profit-making activities on a regular basis.
C) Both a. and b.
D) Neither a. nor b.

Accepted Answer

Relating the profit-making activities to its educational purpose can help the school qualify for an exemption from the Unrelated Business Income Tax (UBIT).

Question 5

Match the following statements.
a. May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.
b. Tax imposed for engaging in transactions with disqualified persons. 
c. Tax imposed for making investments that are too risky.
d. Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses.
-Tax on excess business holdings

Accepted Answer

The answer of Match the following statements.
a. May be subject...

Question 6

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax.
a. 10% initial tax and 25% additional tax on private foundation. 
b. 30% initial tax and 100% additional tax on private foundation. 
c. 10% initial tax and 200% additional tax on private foundation. 
d. 10% initial tax and 100% additional tax on disqualified person.
e. 10% initial tax and 200% additional tax on the disqualified person.
-Tax on self-dealing

Accepted Answer

The tax on self-dealing involves a 10% initial tax and a 200% additional tax on the disqualified person involved in the self-dealing transaction with the private foundation.

Question 7

School has been paying the UBIT every year. To reduce or eliminate this year's tax liability, School might:
A) Accelerate gross income from the profit-making activity into the current tax year.
B) Accelerate deductions from the profit-making activity into the current tax year.
C) Both a. and b.
D) Neither a. nor b.

Accepted Answer

Accelerating deductions into the current tax year can reduce taxable income, thereby reducing or eliminating the tax liability for that year.

Question 8

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 9

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax.
a. 10% initial tax and 25% additional tax on private foundation. 
b. 30% initial tax and 100% additional tax on private foundation. 
c. 10% initial tax and 200% additional tax on private foundation. 
d. 10% initial tax and 100% additional tax on disqualified person.
e. 10% initial tax and 200% additional tax on the disqualified person.
-Tax on excess business holdings

Accepted Answer

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

Question 10

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax.
a. 10% initial tax and 25% additional tax on private foundation. 
b. 30% initial tax and 100% additional tax on private foundation. 
c. 10% initial tax and 200% additional tax on private foundation. 
d. 10% initial tax and 100% additional tax on disqualified person.
e. 10% initial tax and 200% additional tax on the disqualified person.
-Tax on jeopardizing investments

Accepted Answer

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

Question 11

Match the following statements.
a. May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.
b. Tax imposed for engaging in transactions with disqualified persons. 
c. Tax imposed for making investments that are too risky.
d. Tax imposed on investments that enable a private foundation to control unrelated for-profit businesses.
-Private foundation

Accepted Answer

The answer of Match the following statements.
a. May be subject...

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.
-§ 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 13

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-Debt-financed income is the net income from investment assets.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 14

For each of the following taxes which are imposed on private foundations and/or Foundation Managers, match the appropriate initial tax or additional tax.
a. 10% initial tax and 25% additional tax on private foundation. 
b. 30% initial tax and 100% additional tax on private foundation. 
c. 10% initial tax and 200% additional tax on private foundation. 
d. 10% initial tax and 100% additional tax on disqualified person.
e. 10% initial tax and 200% additional tax on the disqualified person.
-Tax on failure to distribute adequate amounts of income

Accepted Answer

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

Question 15

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 16

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-Form 990.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 17

Match the following statements.
a. Exempt from tax on unrelated business.
b. Inappropriate definition.
c. Exempt organization may be subject to the tax on unrelated business income.
d. Annual information return of an exempt organization that is required to file a return and which is not a private foundation.
e. Appropriate definition.
f. Annual information return of a private foundation.
-Unrelated business income is generally that derived from the unrelated trade or business, reduced by the deductions directly connected with the conduct of the unrelated trade or business.

Accepted Answer

The answer of Match the following statements.
a. Exempt from tax...

Question 18

Gallery, a public charity, reports annual gross receipts of $100,000 and has total assets of $425,000. It should file a(n):
A) Form 990.
B) Form 990-PF.
C) Form 990-N (e-Postcard).
D) Form 990-EZ.

Accepted Answer

Gallery is required to file Form 990-EZ because its annual gross receipts are between $50,000 and $200,000 and its total assets are less than $2.5 million.

Question 19

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 20

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.

Quiz 23: Exempt Entities

School has been paying the UBIT every year. To reduce or eliminate this year's tax liability, School might:

School has been paying the UBIT every year. To reduce or eliminate this year's tax liability, School might:

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

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

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

Gallery, a public charity, reports annual gross receipts of $100,000 and has total assets of $425,000. It should file a(n) :

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

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