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Exam 15: Exempt Entities

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Question 31

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Define average acquisition indebtedness with respect to debt-financed property.

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Average acquisition indebtedness is the ...

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Question 32

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Match the following tax forms. -Form 2758

A) Return of Private Foundation.
B) Application for Recognition of Exemption under § 501(c) (3) .
C) Return of Organization Exempt from Income Tax.
D) Return of Certain Excise Taxes on Charities and Other Persons.
E) Application for Recognition of Exemption under § 501(a) .
F) Application for Extension of Time.

G) A) and E)
H) A) and B)

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Question 33

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What is the purpose of the unrelated business income tax?

Match the following statements. -Membership lists

Debt-financed property consists of all real property of a tax-exempt organization on which there is a mortgage.

Which of the following is not an example of an exempt organization?

Which of the following requirements must be satisfied for a bingo game to be classified as not being an unrelated trade or business?

If an exempt organization conducts a trade or business that consists of either exchanging or renting to other exempt organizations the organization's donor or membership list, such trade or business is an unrelated trade or business.

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.

Teal, Inc., is a private foundation which failed to distribute an adequate amount of income for the exempt purpose of Teal. Which of the following statements is correct?

What are the common characteristics of organizations that receive exempt status?

Federal agencies exempt from Federal income tax under § 501(c)(1) are not subject to the unrelated business income tax (UBIT).

George is running for mayor of Culpepper. The members of Third Church adamantly oppose his candidacy. They would like to run a political advertisement in the local newspaper opposing his candidacy. The newspaper ad would have no effect on Third Church's exempt status because the ad opposes George; it does not support his opponent.

A feeder organization is an exempt organization that provides funding for nutritional programs for children.

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

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

General requirements for exempt status include the organization serving the common good and the organization being a not-for-profit entity.

Match the following statements with the correct description. a. Exempt organization under § 501(c)(3). b. May not be subject to Federal income tax. c. Permits limited lobbying activities. d. Exempt organization under § 501(c)(7). e. Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization. -Exempt organization

Assist, Inc., a § 501(c)(3) organization, receives the following sources of support during the tax year. Is Assist, Inc., classified as a private foundation?

Match the following tax forms. -Form 4720