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Question;1630. TF #1;All bona-fide churches generally are exempt from Federal income tax.;a.;True;b. False;1631. TF #2;While the major objective of the Federal income tax law is to raise revenue;social considerations and economic objectives also affect the tax law.;a.;True;b. False;1632. TF #3;Qualified state tuition programs are exempt from Federal income tax under;501(c)(3).;a.;True;b. False;1633. TF #4;An exempt entity in no circumstance is subject to Federal income tax.;a.;True;b. False;1634. TF #5;An organization that is a for-profit entity can partially qualify for exempt status.;a.;True;b. False;1635. TF #6;If an organization qualifies for exempt status for Federal income tax purposes;it is exempt from all Federal income taxes.;a.;True;b. False;1636. TF #7;Engaging in a prohibited transaction can result in an exempt organization being;subject to Federal income tax, but cannot;cause it to lose its exempt status unless the exempt organization repeats the;prohibited transaction.;a.;True;b. False;1637. TF #8;The League of Women Voters is a ? 501(c)(3) organization.;a.;True;b. False;1638. TF #9;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.;True;b. False;1639. TF #10;An exempt organization that is eligible to elect under ? 501(h) to engage in;lobbying activities on a limited basis incurs no tax liability from lobbying;if the lobbying expenditures for the tax year do not exceed the lobbying expenditures;ceiling.;a.;True;b. False;1640. TF #11;A ? 501(c)(5) labor organization is prohibited from lobbying for or against the;passage of legislation.;a.;True;b. False;1641. TF #12;An intermediate sanction imposed by the IRS on an exempt organization is a;lesser sanction than revocation of exempt status.;a.;True;b. False;1642. TF #13;If an exempt organization owns a feeder organization, the exempt organization;is not taxed on the profits of the feeder organization under the unrelated;business income tax (UBIT) rules.;a.;True;b. False;1643. TF #14;A feeder organization is exempt from Federal income taxation because it carries;on a trade or business for the benefit of an exempt organization and remits its;profits to the exempt entity.;a.;True;b. False;1644. TF #15;Theater, Inc., an exempt organization, owns a printing company, Printers, Inc.;which remits 85% of its profits (i.e., taxable income of $100,000) to Theater;Inc. Since Printers remits at least 85% of its profits to Theater, neither;Theater, Inc., nor Printers, Inc., must pay income tax on this $85,000;($100,000 ? 85%).;a.;True;b. False;1645. TF #16;An educational organization such as the College of William and Mary that is;exempt under ? 501(c)(3) cannot be classified as a private foundation.;a.;True;b. False;1646. TF #17;The tax consequences to a donor of making a charitable contribution to an;exempt organization classified as a private foundation may be less favorable;than the tax consequences to a donor of making a charitable contribution to an;exempt organization that is not classified as a private foundation.;a.;True;b. False;1647. TF #18;Exempt organizations which are appropriately classified as private foundations;include churches, educational institutions, and charitable organizations;receiving a major portion of their support from the general public or the U.S.;a state, or a political subdivision thereof.;a.;True;b. False;1648. TF #19;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.;a.;True;b. False;1649. TF #20;The excise taxes such as the tax on self-dealing and the tax on excess business;holdings are imposed on exempt organizations classified as private foundations;and also are imposed on exempt organizations classified as public charities.;a.;True;b. False;1650. TF #21;The excise tax imposed on a private foundation?s excess business holdings is in;effect an audit fee to defray IRS expenses.;a.;True;b. False;1651. TF #22;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.;a.;True;b. False;1652. TF #23;The excise tax imposed on a private foundation?s investment income can be;imposed both as an initial (first-level) tax and an additional (second-level);tax.;a.;True;b. False;1653. TF #24;The excise tax imposed on private foundations for excess business holdings is;imposed on investments that enable the private foundation to control;publicly-held rather than privately-held businesses.;a.;True;b. False;1654. TF #25;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.;a.;True;b. False;1655. TF #26;The unrelated business income tax (UBIT) is designed to treat the entity as if;it were subject to the corporate income tax on its unrelated business taxable;income, with the highest corporate tax rate (35%) applying.;a.;True;b. False;1656. TF #27;Federal agencies exempt from Federal income tax under ? 501(c)(1) are not subject to the unrelated business;income tax (UBIT).;a.;True;b. False;1657. TF #28;A trade or business that is operated by an exempt organization which otherwise;would be subject to the tax on unrelated business income is exempt from tax, if;the profits generated by the trade or business are used by the exempt;organization for exempt purposes.;a.;True;b. False;1658. TF #29;An activity is not an unrelated trade;or business for purposes of the unrelated business income tax (UBIT) unless it;is profitable.;a.;True;b. False;1659. TF #30;A profit-related activity of an exempt organization avoids the unrelated;business income tax if greater than 75% of the merchandise sold had been;received as a contribution.;a.;True;b. False;1660. TF #31;If an exempt organization conducts a trade or business that is regularly;carried on by the organization, it is subject to the unrelated business income;tax (UBIT).;a.;True;b. False;1661. TF #32;An exempt organization that otherwise would be classified as an unrelated trade;or businesses will not be subject to;the unrelated business income tax if the individuals performing substantially;all the work of the trade or business do so without compensation.;a.;True;b. False;1662. TF #33;A corporate payment to an exempt organization that qualifies as a qualified;sponsorship payment is not subject to the unrelated business income tax (UBIT).;a.;True;b. False;1663. TF #34;The income from a bingo game conducted by an exempt organization may be;unrelated business income.;a.;True;b. False;1664. TF #35;The key factors in determining whether an exempt entity?s income from a bingo;game is unrelated trade or business income are whether substantially all the;work is performed by volunteers and all of the prizes to be awarded are;received as donations.;a.;True;b. False;1665. TF #36;An exempt organization is located in the state of Nevada. Gambling in Nevada is;legal. Therefore, bingo games are conducted by both taxable and tax-exempt;organizations. If the net earnings from the bingo games are less than $25,000;the exempt organization is not;subject to the unrelated business income tax (UBIT).;a.;True;b. False;1666. TF #37;Revenue generated by an exempt organization from the distribution of low-cost;items is not income from an unrelated;trade or business.;a.;True;b. False;1667. TF #38;The activity of exchanging with or renting to other exempt organizations the;exempt organization?s donor or membership list is not an unrelated trade or;business.;a.;True;b. False;1668. TF #39;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).;a.;True;b. False;1669. TF #40;In calculating unrelated business taxable income, the exempt organization is;permitted to deduct only the charitable contributions associated with the;unrelated trade or business.;a.;True;b. False;1670. TF #41;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.;a.;True;b. False;1671. TF #42;Personal property rental income is subject to and real property rental income;is not subject to the unrelated;business income tax.;a.;True;b. False;1672. TF #43;If personal property is leased with real property and more than 80% of the rent;income under the lease is from personal property, all of the rent income is;subject to the unrelated business income tax.;a.;True;b. False;1673. TF #44;If the unrelated business income of an exempt organization is $25,000 or less;the unrelated business income tax (UBIT) will be $0.;a.;True;b. False;1674. TF #45;For purposes of the unrelated business income tax, debt-financed property is;all property of the exempt organization that is held to produce income and on;which there is acquisition indebtedness.;a.;True;b. False;1675. TF #46;A church is required to obtain IRS approval for its exempt status if its annual;gross receipts exceed $25,000.;a.;True;b. False;1676. TF #47;Even though a church is not required to obtain IRS approval of its exempt;status, it still must file Form 990 (Return of Organization Exempt from Income;Tax) annually.;a.;True;b. False;1677. TF #48;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.;a.;True;b. False;1678. TF #49;All exempt organizations which are subject to the unrelated business income tax;must file Form 990-T (Exempt Organization Business Income Tax Return).;a.;True;b. False;1679. TF #50;Unless the ?widely available? provision is satisfied, a ? 501(c)(3) exempt;organization (excluding churches and private foundations) must make copies of;the following available to the general public: Form 990 (Return of Organization;Exempt from Income Tax) and Form 1023 [Application for Recognition of Exemption;under ? 501(c)(3)] or Form 1024 [Application for Recognition of Exemption under;? 501(a)].;a.;True;b. False

 

Paper#59247 | Written in 18-Jul-2015

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