Federal Tax Procedures: Substantiation Requirements

Question 1

For Corporations the tax on unrelated business taxable income

Answer 1

is computed at corporate income tax rates

Question 2

An exempt organization

Answer 2

is not taxed on unrelated business income of less than $1,000

Question 3

The business gift deduction

Answer 3

is limited to $25 per donee, per year

Engraving, gift wrapping, mailing, and delivery charges may be deducted in addition to the $25 per donee, per year.

Gifts to supervisors and employers are not deductible

Question 4

Promotional materials costing $4 or less

Answer 4

are considered advertising

Question 5

An organization which engages in insubstantial nonexempt activities

Answer 5

will not lose its tax-exempt organization status, but it will be taxed on its unrelated business income

Question 6

Under IRC Section 501(c)(2), a title holding company organized as a corporation will qualify for exemption from federal income tax if

Answer 6

it is organized for the following activities: (1) holding title to property, (2) collecting income from such property, and (3) turning over the entire amount collected, less expenses, to an organization that itself is exempt under Section 501(a)