Question 1

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is not correct?

Accepted Answer

A)   The unrelated business income tax (UBIT)  does not apply to exempt organizations that receive broad public support.
B)   The unrelated business income tax (UBIT)  treats the tax-exempt entity as if it were subject to the corporate income tax on its unrelated business income.
C)   Unrelated business income is income derived from activities not related to the exempt purpose of the exempt organization.
D)   Only a. and c. are not correct.
E)   a., b., and c. are not correctF) A) and E)
G) All of the above

Question 3

What are intermediate sanctions and to what types of exempt organizations do they apply?

Accepted Answer

Intermediate sanctions apply to so-calle...

Question 4

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.

Accepted Answer

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

Question 5

For an activity to be considered as regularly carried on for purposes of the unrelated business income tax,the activity must be conducted during the work week (i.e.,activities performed on the weekend are not considered in determining if the activity is regularly carried on).

Accepted Answer

A) True 
 B)False

Question 6

Tan,Inc.,a tax-exempt organization,has $65,000 of net unrelated business income.Total charitable contributions (all associated with the unrelated trade or business) are $7,500.Assuming that the $7,500 was deducted in calculating net unrelated business income,what is Tan's unrelated business taxable income?

Accepted Answer

A)   $57,500.
B)   $65,250.
C)   $66,000.
D)   $72,500.
E)   Some other amount.F) A) and E)
G) A) and B)

Question 7

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

Accepted Answer

No.Such organizations may be only partia...

Question 8

Which of the following is not an excise tax that may be imposed on a private foundation?

Accepted Answer

A)   Tax on jeopardizing investments.
B)   Tax on self-dealing.
C)   Tax on excessive foundation manager compensation.
D)   Tax on excess business holdings.
E)   All of these taxes may be imposed on a private foundation.F) A) and B)
G) B) and D)

Question 9

Which of the following excise taxes are imposed on the private foundation because it engages in prohibited transactions?

Accepted Answer

A)   Tax on investment income.
B)   Tax on self-dealing.
C)   Tax on failure to distribute income.
D)   Only b. and c.
E)   a., b., and c.F) B) and D)
G) A) and E)

Question 10

Is there a materiality exception associated with the unrelated business income tax?

Accepted Answer

Yes.The materiality exception ...

Question 11

What income and activities are not subject to the feeder organization rules?

Accepted Answer

The following income...

Question 12

Describe how an exempt organization can be eligible to lobby.

Accepted Answer

Certain exempt organizations are permitt...

Question 13

Which of the following types of § 501(c) (3) organizations are not private foundations?

Accepted Answer

A)   Hospitals.
B)   Churches.
C)   Colleges and universities.
D)   Only a. and b.
E)   a., b., and c.F) A) and D)
G) A) and C)

Question 14

The due date for both Form 990 (Return of Organization Exempt from Income Tax)and Form 990-PF (Return of Private Foundation)is the fifteenth day of the fifth month after the end of the taxable year.

Accepted Answer

A) True 
 B)False

Question 15

Match the following statements.

Accepted Answer

The answer of Match the following statements.
 ...

Question 16

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Accepted Answer

A) True 
 B)False

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

Why are some organizations exempt from Federal income tax?

Accepted Answer

The Code's treatment of exempt organizat...

Question 19

Which of the following statements regarding a private foundation is not correct?

Accepted Answer

A)   Only certain exempt organizations are classified as private foundations.
B)   A donor who makes a contribution to a private foundation has identical tax consequences as a donor who makes a contribution to a public charity.
C)   A private foundation may be subject to certain excise taxes because it is a private foundation.
D)   A church is not a private foundation.
E)   All of the statements are correct.F) C) and D)
G) C) and E)

Question 20

Which of the following activities,whose proceeds benefit an exempt organization,are subject to the feeder organization rules?

Accepted Answer

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.F) A) and B)
G) B) and C)

Exam 23: Exempt Entities

The due date for both Form 990 (Return of Organization Exempt from Income Tax)and Form 990-PF (Return of Private Foundation)is the fifteenth day of the fifth month after the end of the taxable year.

Correct Answer
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Correct Answer
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Which of the following is not an excise tax that may be imposed on a private foundation?

Correct Answer
verified

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

Correct Answer
verified

Match the following statements.

Correct Answer
verified

What are intermediate sanctions and to what types of exempt organizations do they apply?

Correct Answer
verified
Intermediate sanctions apply to so-calle...
View Answer

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.

Correct Answer
verified

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Correct Answer
verified

Which of the following excise taxes are imposed on the private foundation because it engages in prohibited transactions?

Correct Answer
verified

Why are some organizations exempt from Federal income tax?

Correct Answer
verified
The Code's treatment of exempt organizat...
View Answer

Is there a materiality exception associated with the unrelated business income tax?

Correct Answer
verified
Yes.The materiality exception ...
View Answer

Which of the following statements regarding a private foundation is not correct?

Correct Answer
verified

What income and activities are not subject to the feeder organization rules?

Correct Answer
verified
The following income...
View Answer

Which of the following activities,whose proceeds benefit an exempt organization,are subject to the feeder organization rules?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Which of the following types of § 501(c) (3) organizations are not private foundations?

Correct Answer
verified

For an activity to be considered as regularly carried on for purposes of the unrelated business income tax,the activity must be conducted during the work week (i.e.,activities performed on the weekend are not considered in determining if the activity is regularly carried on).

Correct Answer
verified

Describe how an exempt organization can be eligible to lobby.

Correct Answer
verified
Certain exempt organizations are permitt...
View Answer

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

Correct Answer
verified
No.Such organizations may be only partia...
View Answer

Correct Answer
verified

Exam 23: Exempt Entities

The due date for both Form 990 (Return of Organization Exempt from Income Tax)and Form 990-PF (Return of Private Foundation)is the fifteenth day of the fifth month after the end of the taxable year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not an excise tax that may be imposed on a private foundation?

Correct AnswerverifiedShow Answer

Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.

Correct AnswerverifiedShow Answer

Match the following statements.

Correct AnswerverifiedShow Answer

What are intermediate sanctions and to what types of exempt organizations do they apply?

Correct AnswerverifiedIntermediate sanctions apply to so-calle...View AnswerShow Answer

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.

Correct AnswerverifiedShow Answer

The purpose of the excise tax imposed on a private foundation for failure to distribute sufficient levels of income is to motivate the foundation to distribute more of its income for application to exempt purposes and thus be classified as a feeder organization.

Correct AnswerverifiedShow Answer

Which of the following excise taxes are imposed on the private foundation because it engages in prohibited transactions?

Correct AnswerverifiedShow Answer

Why are some organizations exempt from Federal income tax?

Correct AnswerverifiedThe Code's treatment of exempt organizat...View AnswerShow Answer

Is there a materiality exception associated with the unrelated business income tax?

Correct AnswerverifiedYes.The materiality exception ...View AnswerShow Answer

Which of the following statements regarding a private foundation is not correct?

Correct AnswerverifiedShow Answer

What income and activities are not subject to the feeder organization rules?

Correct AnswerverifiedThe following income...View AnswerShow Answer

Which of the following activities,whose proceeds benefit an exempt organization,are subject to the feeder organization rules?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Which of the following types of § 501(c) (3) organizations are not private foundations?

Correct AnswerverifiedShow Answer

For an activity to be considered as regularly carried on for purposes of the unrelated business income tax,the activity must be conducted during the work week (i.e.,activities performed on the weekend are not considered in determining if the activity is regularly carried on).

Correct AnswerverifiedShow Answer

Describe how an exempt organization can be eligible to lobby.

Correct AnswerverifiedCertain exempt organizations are permitt...View AnswerShow Answer

Are organizations that qualify for exempt organization status completely exempt from Federal income taxation?

Correct AnswerverifiedNo.Such organizations may be only partia...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Intermediate sanctions apply to so-calle...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Code's treatment of exempt organizat...
View Answer

Correct Answer
verified
Yes.The materiality exception ...
View Answer

Correct Answer
verified

Correct Answer
verified
The following income...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Certain exempt organizations are permitt...
View Answer

Correct Answer
verified
No.Such organizations may be only partia...
View Answer

Correct Answer
verified