General
What type of tax is a tax-exempt organization exempt from per the IRS?
Income tax
What does the acronym UBTI stand for?
Unrelated Business Taxable Income
What is the form series that tax-exempt organizations file annually?
990
What is an exempt purpose as defined in code section 501(c)(3)?
Exempt purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals
What is the difference between a nonprofit organization and a tax-exempt organization?
A tax-exempt organization is a nonprofit organization that has been recognized by the IRS
What is one requirement for an activity to be considered UBTI?
Trade or business, regularly carried on, not substantially related to the exempt purpose
What is the original due date for the income tax return for tax-exempt organizations?
15th day of the 5th month after the close of the organization's fiscal year
What is the test a 501(c)(3) organization must pass to be considered a public charity?
Public support test
What code section governs tax-exempt organizations?
501(c)
When was UBTI enacted?
1950
What form should an organization file to apply for tax-exempt status with the IRS?
1023 or 1024
What is one activity that could jeopardize a public charity's tax-exempt status?
Private inurement, excessive lobbying, political activity, substantial UBTI
If the organization has had its tax-exempt status revoked, what form must it file?
1023 or 1024
What is one reason a rental property would trigger UBTI?
Debt-financed property, service revenue, personal property rentals
What form does a tax-exempt organization file if it has compensated its president more than $1,000,000?
4720
What is the threshold for the amount of political activities a public charity can conduct before its tax exempt status is revoked?
Zero
What is one reason that a board member would not be considered independent?
Compensated over $10,000 by the organization or a related organization, is reported on schedule L as having a "transaction with interested person"
When does a for-profit subsidiary trigger UBTI for the tax-exempt parent company?
Interest, rental or royalty payments paid to the parent
What form does a private foundation file when it has annual gross receipts of $50,000 or less?
990-PF
What is one activity a public charity can do that a private foundation cannot?
Investment in controlled for-profit subsidiary, grants to individuals, direct lobbying