Chapter 20 - Exempt Organizations

Question 1

What businesses qualify for Exempt Organization Status

Answer 1

1) It is organized as a corporation (including LLCs), trust, foundation, Fund, society, etc .

2) It cannot be sole proprietorship, an individual, or a partnership

Question 2

Unrelated Business Taxable Income Tax

Answer 2

is carried by the production of income ( even loss) that is not substantially related to the performance of exempt purpose or function ( doesn’t contribute more than insu stantial benefits to the exempt purposes.

Question 3

How does a except organization report donated property that it sells ?

Answer 3

Report 8282 if the goods are sold within 3 years

It must be filed within 125 days after the disposition and copy must be sent to the donor

Question 4

What is the extension form that an except organization must file?

Answer 4

Form 8868

to request an automatic 6 months for 990, 990 EZ, 990 PF, or 990 T

Question 5

Form 990 - T

Answer 5

Exempt Organization Business Income Tax Return

It is open to public inspection for 3 years from 990 - T’s filing date ( whichever is later ).

Question 6

Failure to file Penalties

Answer 6

1) 20.00s a day if not filed, not providing all details, or incorrect information. Maximum is smaller of 11,000 or 5% of exempt organization’s GI

2) 110.00 a day if organization’s GI is over 1,129,000 for the year.