CHAPTER 23 EXEMPT ENTITIES

Give an example of the indicated types of exempt organizations.

a. League of Women Voters.

b. Teachers’ association.

c. American Plywood Association.

d. Six Flags over Texas theme park.

e. Salvation Army.

2. § 501(c)(3) organization

3. § 501(c)(4) civic league

4. § 501(c)(5) labor organization

5. § 501(c)(6) business league

6. Not an exempt organization

Match the following statements with the correct description.

a. Exempt organization under § 501(c)(3).

b. May not be subject to Federal income tax.

c. Permits limited lobbying activities.

d. Exempt organization under § 501(c)(7).

e. Carries on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.

7. Exempt organization

8. Feeder organization

9. University of Virginia

10. Kentwood Rodeo Club

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Match the following statements.

a. Carries on a trade or business for the benefit of an exempt organization, remits its profits to the exempt organization, and is notexempt from Federal income tax.

b. May be subject to some Federal income taxation and classification may adversely affect amount of charitable contributions received.

c. Tax imposed for engaging in transactions with disqualified persons.

d. Enables certain exempt organizations to engage in lobbying activities on a limited basis.

e. Tax imposed on investments that enable a private foundation to control unrelated businesses.