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Exam 15: Exempt Entities

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Question 51

Multiple Choice

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

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 E)
G) A) and B)

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Question 52

True/False

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The key factor in determining whether an exempt entity's income from a bingo game is unrelated trade or business income is whether substantially all the work is performed by volunteers.

A) True
B) False

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Question 53

True/False

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A church is not required to obtain IRS approval for its exempt status.

Radio,Inc. ,an exempt organization,trains disabled individuals to be radio announcers.Rather than hold a traditional graduation exercise,the graduates compete in a radio announcer contest.Such activities are held four times each year.An admission fee of $10 is charged to the general public to attend the contest.Eight hundred people attended the contest this year,and prizes of $2,000 were given to the top 3 graduates.Calculate the amount of Radio's unrelated business income from this activity.

Exchanging with or renting to other for-profit organizations the exempt organization's donor or membership list is not an unrelated trade or business.

The excise tax that is imposed on private foundations for making jeopardizing investments is imposed because the foundation has made speculative investments that put the foundation's income at risk.

Which of the following taxes that are imposed on private foundations is,effectively,an audit fee to defray IRS expenses?

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

Which of the following requirements are among the three requirements that must be satisfied for an exempt organization to be subject to the unrelated business income tax?

The excise tax imposed on a private foundation's excess business holdings is in effect an audit fee to defray IRS expenses.

If personal property is leased with real property and more than 50% of the rent income under the lease is from personal property,all of the rent income is subject to the unrelated business income tax.

Country,Inc. ,an exempt organization,has included among other amounts the following in calculating net unrelated business income of $400,000. The only expenses incurred associated with these items are rental expenses (which includes depreciation of $9,500)of $14,000.Calculate Country,Inc.'s UBTI.

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

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

Describe how an exempt organization can be eligible to lobby.

A church that is exempt under § 501(c)(3)cannot be classified as a private foundation.

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

Which of the following statements regarding intermediate sanctions is correct?

The excise taxes such as the tax on self-dealing and the tax on excess business holdings are imposed only on exempt organizations classified as private foundations.

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