Federal Taxation Test Paper
Tax 2 Test 3
Multiple Choice
Identify the choice that best completes the statement or answers the question.
_D___ 1. Which of the following are organizations exempt under § 501(c)(3)?
a. Girl Scouts of America.
b. Washington and Lee University.
c. Veterans of Foreign Wars (VFW).
d. Only a. and b. are § 501(c)(3) organizations.
e. All of the above are § 501(c)(3) organizations.
__D__ 2. Which of the following is a requirement for exempt status?
a. The organization does not exert political influence.
b. The organization has not been subject to intermediate sanctions for the past 24 months.
c. The organization serves some type of common good.
d. Only a. and c.
e. a., b., and c.
__C__ 3. Rose, Inc., a qualifying § 501(c)(3) organization, incurs lobbying expenditures of $145,000 during the taxable year. Exempt purpose expenditures are $500,000. If Rose makes the election under § 501(h) to make lobbying expenditures on a limited basis, its tax liability resulting from the lobbying expenditures is:
a. $0.
b. $7,250.
c. $11,250.
d. $36,250.
e. Some other amount.
__E__ 4. Which of the following activities, whose proceeds benefit an exempt organization, are subject to the feeder organization rules?
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.
__D__ 5. Which, if any, of the following statements correctly reflects the rules applicable to the alternate valuation date (i.e., § 2032)?
a. The election is made by the executor.
b. Can be elected even though no estate tax return (i.e., Form 706) has to be filed.
c. Can be elected only if it reduces the amount of the gross estate or reduces the estate tax liability.
d. Its election does not affect the income tax basis of property included in the gross estate.
e. None of the above.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
_D___ 1. Which of the following are organizations exempt under § 501(c)(3)?
a. Girl Scouts of America.
b. Washington and Lee University.
c. Veterans of Foreign Wars (VFW).
d. Only a. and b. are § 501(c)(3) organizations.
e. All of the above are § 501(c)(3) organizations.
__D__ 2. Which of the following is a requirement for exempt status?
a. The organization does not exert political influence.
b. The organization has not been subject to intermediate sanctions for the past 24 months.
c. The organization serves some type of common good.
d. Only a. and c.
e. a., b., and c.
__C__ 3. Rose, Inc., a qualifying § 501(c)(3) organization, incurs lobbying expenditures of $145,000 during the taxable year. Exempt purpose expenditures are $500,000. If Rose makes the election under § 501(h) to make lobbying expenditures on a limited basis, its tax liability resulting from the lobbying expenditures is:
a. $0.
b. $7,250.
c. $11,250.
d. $36,250.
e. Some other amount.
__E__ 4. Which of the following activities, whose proceeds benefit an exempt organization, are subject to the feeder organization rules?
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.
__D__ 5. Which, if any, of the following statements correctly reflects the rules applicable to the alternate valuation date (i.e., § 2032)?
a. The election is made by the executor.
b. Can be elected even though no estate tax return (i.e., Form 706) has to be filed.
c. Can be elected only if it reduces the amount of the gross estate or reduces the estate tax liability.
d. Its election does not affect the income tax basis of property included in the gross estate.
e. None of the above.