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R3 Tax Exempt
| Question | Answer |
|---|---|
| How is 501.c.1 Unique? | Organized under the act of congress. Does not need to.... -make a written application for exempt status -become incorporated -issue capital stock |
| How does 501.c.3. become exempt? | Must apply and be approved by IRS to be tax-exempt |
| How can a 501.c.3 loose exempt status? | Substantial part of activities being non-exempt activities. Ex; INFLUENCE LEGISLATION -Intervene in political campaigns -Endorse Candidates -Engage in fundraising for political candidates |
| What is a 509? | A Private Foundation -Must file a 990-PF *Cannot be a Public Foundation |
| What is a Public Foundation? | -Maximum 50% type charitable deduction donees -Broadly support receiving more than 1/3 support from members -Supporting organizations -Public Safety testing Organizations |
| 2 Ways 509 can be terminates? | Voluntarily -Notifying IRS of plan to terminate Involuntarily -They become a public charity -violation of provisions |
| What is UBI Unrelated Business Income? | Gross Income unrelated activities - Business Deductions 1. Derived from an activity that constitutes a trade of business 2. Regularly carried on 3. Not related to the tax-exempt purpose |
| Work is completed by unpaid workers is this included in unrelated business income? | No, because the workers are unpaid this makes the business or activity RELATED & NON TAXABLE! ex: old people making crafts |
| Is there tax on UBI? | Yes. |
| Deduction on UBI? | $1,000 excess is taxed. |
| Types of Income excluded for UBI Tax.... | -Bingo Games -Royalties, Dividends, Interest, Annuities -Income from Research -Income from labor unions |
| What is the UBI taxed at? | Must comply with the... Installment Payments of Estimated Tax by corporations. |
| When is a 990 return due? | May 15th Annually |
| What type of organizations are not required to file a form 990? | "$50,000 & CHRIST" $50,000 or less Gross Receipts -Churches -High Schools -Religious -Internal Support Auxiliaries -Societies Mission related -Tax-Exempt Org by Congress |
| UBI is taxed at... | Corporate Tax Rates |
| Types of Orgs. that DO NOT need to file paperwork with IRS to become tax exempt... | -Churches -Qualified Pension -Profit Sharing Trust -501c1 Act by Congress |
| Examples of UBI | -The sale of laundry services by an exempt hospital to other hospitals. -The sale of heavy-duty appliances to senior citizens by an exempt senior citizens center. -Accounting and tax services performed by a local chapter of a labor union for its member |
Created by:
Ashley Price-Dyment
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