Tax Exempt Organizations - CPA Regulation (REG)
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With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
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Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
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The private foundation status of an exempt organization will terminate if it:
The private foundation status of an exempt organization will terminate if it:
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Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
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Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Tap to reveal answer
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
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Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
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Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
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ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
Tap to reveal answer
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
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Which of the following is the correct designation for an exempt organization?
Which of the following is the correct designation for an exempt organization?
Tap to reveal answer
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
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With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
Tap to reveal answer
Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
← Didn't Know|Knew It →
The private foundation status of an exempt organization will terminate if it:
The private foundation status of an exempt organization will terminate if it:
Tap to reveal answer
Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
← Didn't Know|Knew It →
Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Tap to reveal answer
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
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Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
Tap to reveal answer
Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
← Didn't Know|Knew It →
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
Tap to reveal answer
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
← Didn't Know|Knew It →
Which of the following is the correct designation for an exempt organization?
Which of the following is the correct designation for an exempt organization?
Tap to reveal answer
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
← Didn't Know|Knew It →
With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
With regard to unrelated business income of an exempt organization, which one of the following statements is correct?
Tap to reveal answer
Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
Unrelated business income (UBI) is tax exempt up to $1,000 (only UBI in excess of $1,000 is taxed). Any activity that would create UBI that results in a loss may be carried over like the NOL of any other organization. UBI does not have a specific limit above which tax exempt status is lost. Additionally, UBI relates to an ongoing business enterprise, and does not apply to one-time or intermittent activity.
← Didn't Know|Knew It →
The private foundation status of an exempt organization will terminate if it:
The private foundation status of an exempt organization will terminate if it:
Tap to reveal answer
Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
Termination of tax-exempt status for a private foundation may occur voluntarily or involuntarily. Involuntary termination occurs when a foundation becomes a public charity; an organization cannot be both. Involuntary termination may also occur if the IRS makes a determination to terminate tax exempt status of an organization due to repeated or willful violations of private foundation provisions.
← Didn't Know|Knew It →
Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income?
I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.
Tap to reveal answer
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
Unrelated business income (UBI) is an unrelated business that meets three criteria: 1) it is a trade or business; 2) it regularly carried on; and 3) is not substantially related to furthering the tax-exempt purpose of the organization. In both of the options given, the information indicates that these activities relate to a tax-exempt organization’s purpose (rehabilitation of disabled persons or therapy for emotionally disabled persons).
← Didn't Know|Knew It →
Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
Of the following types of business, which may not qualify for a 501c3 exemption from federal income taxes?
Tap to reveal answer
Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
Partnerships are not included in the tax exempt section of IRC Section 501c3 which provides for corporations, funds, and foundations to be organizations eligible for exemption from federal income taxes.
← Didn't Know|Knew It →
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
Tap to reveal answer
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
← Didn't Know|Knew It →
Which of the following is the correct designation for an exempt organization?
Which of the following is the correct designation for an exempt organization?
Tap to reveal answer
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
← Didn't Know|Knew It →
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
ABC Trust is an exempt organization that operates under a corporate charter granted by the state in which its principal office is located. ABC’s tax on unrelated business taxable income is:
Tap to reveal answer
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
ABC’s tax on unrelated business taxable income is computed at corporate income tax rates. Unless the organization is taxable as a trust, its UBTI is subject to regular corporate taxes.
← Didn't Know|Knew It →
Which of the following is the correct designation for an exempt organization?
Which of the following is the correct designation for an exempt organization?
Tap to reveal answer
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
Under US Federal regulations, tax-exempt organizations are qualified under 501(c)(3).
← Didn't Know|Knew It →