R6 - Tax-Exempt Organizations Flashcards
1
Q
Types of TE Orgs
A
- Sec 501(c)(1)
- Sec 501(c)(2)
- Sec 501(c)(3)
2
Q
SEc 501(c)(1)
A
Ex: Credit Union
- Organized under Congress
- Does not need to make a written application to be TE
- Does not have an annual requirement to file
3
Q
SEc 501(c)(2)
A
Ex: HoldCo for exempt orgs
- It’s a holding company for a TE org.
- Collects money from the property held and returns net income to TE org.
- Must file Form 1024 to apply for TE status.
4
Q
SEc 501(c)(3) - THE IMPORTANT ONE!!!!!
A
Ex: Public charities/Private Foundations
- Must file Form 1023 to apply for TE status AND be approved by the IRS.
5
Q
Requirements for TE status
A
- No part of earnings may benefit a private SH or individual.
- A substantial part of the activities may not be nonexempt activities (propaganda, influence law)
- Org may not directly participate or intervene in political campaigns.
6
Q
Sec 509 Private Foundations - Exclusions
A
- Max 60% charitable deduction donees.
- Receives >1/3 of their annual income from the public and <1/3 from investment income and UBI.
- Supporting orgs.
- DPS testing orgs
7
Q
Sec 509 Private Foundations - Filing Requirements
A
- Form 990-PF (information return)
8
Q
Sec 509 Private Foundations - Terminations
A
- Involuntary Termination: When PF becomes a public charity.
- Voluntary Termination: By notifying IRS.
9
Q
UBI = Taxable
A
Ex. College bookstore/Cafeteria
- Derived from trade or business
- Regular
- Not related to TE purpose.
10
Q
UBI - Exclusions
A
- Bingo games/Games of Chance
- Activity conducted for the convenience of org members.
- Trade show.
- Exchange or rental of membership lists.
- Sale of items received as contributions (Goodwill).
- Sale of articles made by disabled persons (art with feet).
- When work is performed by unpaid volunteers.
11
Q
Taxation of UBI
A
- Form 990-T
- Exemption: $1,000
- Separate calc of each UBI
12
Q
Excluded types of income
A
- Dividend, interest
- Royalties
- Rents
- Income from research
- Gains and losses of dispositions of property (not for sale)
13
Q
Membership Organizations
A
- Social Clubs, HOAs.
- Deductions to the extent of TE activity.
- If makes a profit, it is taxable.
14
Q
Feeder Org
A
- Taxed on its entire income.
15
Q
Annual Filing Requirement
A
- Form 990, due by May 15.
- Form 990-EZ is gross receipts are>$200K and total assets are >$500K